The magnitude of layoffs at Greater Southeast Community Hospital this month caught employees and their union leaders off guard, but administrators insist the 200 job cuts do not signal a return to bankruptcy.
“It’s never a shock, but it was a surprise,” said Joan Greaves, nurse and president of the D.C. Nurses Association.
Greater Southeast primarily serves the poor and has struggled with its finances over the years, but employees say they recently saw signs of progress.
The hospital’s parent company, Arizona-based Doctors Community Healthcare Corp., emerged from bankruptcy last year. The hospital also regained its full accreditation, hired new management, recruited full-time nurses to replace contract employees and won an award for its care of stroke and heart-attack victims.
But on July 1, Greater Southeast cut 200 jobs, including 136 full-time positions.
“Things seemed to be going pretty well,” said Jamie Kendrick, executive director of the Service Employees International Union State Council for Maryland and the District. “That’s why we were caught off guard by this.”
Greater Southeast administrators say the layoffs were needed because the hospital was overstaffed.
“It is not in response to any kind of dire financial straits,” said Carolyn Graham, vice president of government and community relations at the hospital. She said the hospital had too many employees for the number of patients it was seeing.
“We had to look at what was best for the hospital with a view toward growing once we were better managed,” said Miss Graham, former D.C. deputy mayor for children, youth, families and elders. “The layoffs touched everybody, from physicians to technicians to administration.”
Mr. Kendrick said some of the 80 union members — including janitors, secretaries and technicians — who lost their jobs as a result of the layoffs felt “snookered” by the hospital.
He said some of the members who lost their jobs had rallied on the hospital’s behalf. He said the union held a rally earlier this year asking D.C. officials to lift a cap restricting the number of beds Greater Southeast could operate.
Miss Graham said the hospital gave employees 10 days of severance pay in addition to the 30 days required under contract.
In another sign that finances seemed to be getting back on track, Doctors Community Healthcare recently resumed employing a prominent lobbyist for the first time since 2002.
According to a filing this month with the D.C. Office of Campaign Finance, Doctors Community paid lobbyist Kerry S. Pearson $140,000 in fees from January to last month.
Doctors Community managed to retain control of Greater Southeast after reorganizing under bankruptcy protection, but some of its executives still are facing legal hurdles in connection with the case.
A liquidating trust charged with recouping money for creditors has filed a lawsuit against company executives for “excessive salaries and bloated overhead,” including the use of a corporate jet, before Doctors Community declared bankruptcy in 2002.
In legal papers filed last month, executives defended the salaries and cited post-September 11, 2001, security concerns as the reason for spending more than $4 million to lease a corporate jet.
Meanwhile, union officials say they hope the legal and financial troubles are over.
“We want this place to survive,” Miss Greaves said.