SPRINGFIELD — Baystate Health is laying off 117 corporate employees and has closed its central warehouse in Holyoke in what the company calls a “difficult step” in an effort to drive greater efficiency for the health care company, which serves more than 800,000 people throughout New England.
“This week, Baystate Health has taken another difficult step in driving greater efficiency across our health system by reducing roles in our corporate functions workforce,” spokesperson Heather Duggan said in a statement.
According to Duggan, the layoffs amount to less than 1% of the company’s workforce, and the individuals impacted have been notified and provided with support resources.
“We have made decisions that have impacted people’s employment at Baystate, our remaining coworkers, families and friends, and the communities that we serve,” Duggan wrote. “Baystate Health and its leaders are approaching them with focus, intentionality and through the lens of our mission and values, as well as with empathy, respect and transparency as we understand these decisions are impactful.”
Duggan said that over the past six months, Baystate Health has modernized its supply distribution model in an effort to improve efficiency, and minimize inventory waste and storage space. As a result, the hospital closed its central warehouse in Holyoke on Jan. 31.
At the same time, Duggan said, “today, we face ever-increasing headwinds.”
Those headwinds are a combination of a large and growing demand for care by individuals assisted by government programs such as Medicare and Medicaid, and workforce challenges such as rising costs for supplies, drugs, technology and other essential services, according to Duggan.
Other factors Duggan cited include the expiration of enhanced Affordable Care Act (ACA) subsidies; cuts to Medicaid funding, eligibility, enrollment and provider rates; shortfalls with the state’s Healthcare Safety Net fund; and other reimbursement barriers.
However, Duggan said that since November 2024, Baystate Health has made progress toward achieving greater financial stability, allowing reinvestment in “our people, technology and patient care.”
Last year, Duggan said Baystate Health met budget expectations for the first time in six years. This allows for better capital investments that aim to address clinical needs and to grow the company’s health care system as a whole.
“We continue to actively recruit physicians, advanced practice providers, nurses and clinicians in response to the growing health care needs across our communities,” she wrote.
Along with the reduction, Duggan said Baystate Health will now outsource clinical, biomedical engineering to Indiana-based TRIMEDX, a medical equipment management organization. Duggan said this will allow the hospital to expand resources, technology and operational efficiencies to better serve clinicians and patients.
“Our clinical engineering team will transition to TRIMEDX employees starting in May 2026,” she wrote, adding that the hospital system remains committed to “building a thriving and vibrant future for Baystate Health, including Health New England, and health and health care in western Massachusetts.”