UPMC is laying off about 1,000 employees in a “realignment” the nonprofit said will help it face “the realities of a still-evolving, post-pandemic marketplace.”

The layoffs reflect about 1% of UPMC’s total workforce of over 100,000 people and are primarily among nonclinical and administrative staff, Vice President and Chief Communications Officer Paul Wood said in an emailed statement. He said the system will be offering those impacted “enhanced severance pay and benefits coverage.”

The “limited reductions” will also involve the closing of open positions, the elimination of redundancies and “other actions,” Wood said.

“This realignment will not alter UPMC’s investments in our communities, facilities, commitment to clinical care and research, strategic growth or to offering those throughout our workforce industry-leading benefits,” Wood wrote in the statement.

Pittsburgh-based UPMC is an integrated health system and one of Pennsylvania’s largest employers. Its provider, insurance and other business arms logged $27.7 billion of revenue across 2023 as volumes rose and insurance membership grew.

However, the nonprofit reported a $198.3 million operating loss (-0.7% operating margin) last year as insurance claims expenses jumped 13.6% and labor costs rose 6.4%. It had posted a $162 million operating gain (0.6% operating margin) the year before.

UPMC reports almost $200M operating loss as expenses rise

The system did narrow its 2023 bottom line loss to $31 million thanks to its investment returns, though it had logged roughly a billion in net losses during the 2022 fiscal year.

In its year-end financial report, UPMC’s management wrote that “even with increased expenses to deliver high-quality care as a result of various economic factors, in 2023 UPMC continued to forge ahead with investments to grow access to world-class clinical care … advance healthcare excellence through quality and innovation, care for our communities, grow our insurance services and invest in our future workforce.”