Somerville, Mass.-based Mass General Brigham has started a new round of layoffs, its second in less than two years, as the state’s largest health system aims to lift an operating margin its leaders say is too thin to sustain its mission, The Boston Globe reported Oct. 22.
A spokesperson for the health system told Becker’s the workforce reductions began last week but did not disclose the number or types of roles affected.
“While previous actions helped improve our financial position, our operating performance still requires broader structural changes,” the system said in an Oct. 22 statement shared with Becker’s. “To strengthen our long-term sustainability, we must improve coordination across our hospitals and care settings, accelerating our transition to a more integrated model of care. These are difficult but necessary decisions to ensure we can continue providing exceptional care for patients, advancing research and education, and investing in the people and programs that are central to our mission.”
Mass General Brigham reported an operating income of $59 million (0.3% margin) on $22.8 billion in operating revenue in fiscal 2025. That compares to an operating gain of $46 million (0.2% margin) on $20.6 billion in revenue the previous fiscal year.
Leaders have set a goal of an operating margin of about 1.5%, or roughly $300 million, by fiscal 2028, according to internal messages to physician leaders and people managers shared with Becker’s. Mass General Brigham said that is the minimum amount needed to keep investing in patient care, the workforce, research, technology and capital projects such as a planned new tower at Brigham and Women’s Hospital.
The gap has widened this year. The system is running more than $300 million behind budget in fiscal 2026, David Brown, MD, president of academic medical centers; CFO Niyum Gandhi; and COO Ron Walls, MD, wrote in a Sept. 17 internal message.
The executives signaled that this round will reach beyond the back office. They said the system must redesign clinical and operational models and align staffing and resources with patient needs.
“We must eliminate programs and activities that do not fully align with our strategy and priorities, even those we have had for many years,” they wrote. “Administrative savings alone will not be enough.”
At least one clinical unit is affected. Boston-based Mass Eye and Ear will close its general pediatric inpatient unit by Jan. 1, the Globe reported, citing a memo from Phoebe Yager, MD, head of pediatric critical care at Mass General for Children. Patients will be treated at other Mass General Brigham for Children sites, including Massachusetts General Hospital in Boston and Newton-Wellesley Hospital in Newton, Mass. The system has identified other clinical opportunities within Mass General Brigham for affected physicians, according to the report.
Mass General Brigham’s thin operating results contrast with its bottom line. It reported a net income margin of $2.4 billion in fiscal 2025, up from $2 billion the previous year.
But leaders argue those gains cannot close the gap. In an Aug. 14 internal message, they wrote that investment returns vary year to year and are not a dependable source for recurring costs such as salaries, benefits and supplies. Reserves instead fund long-range capital projects, including the Ragon building at Mass General and planning for the Brigham tower.
Its long-term debt also stands at about $5.6 billion, according to financial documents obtained by Becker’s.
Leaders attributed the squeeze to labor, supply and operating costs outpacing reimbursement from Medicare, Medicaid and commercial insurers. About 65% of the system’s expenses are labor related, and expenses have grown faster than revenue for many years, they wrote. Massachusetts hospitals operated at an average loss of 2% last year, according to an Aug. 6 internal message.
The latest cuts follow the largest layoffs in the system’s history. In early 2025, Mass General Brigham eliminated about 1,500 positions in two waves, primarily in nonclinical, management and administrative roles. At the time, the system cited a projected $250 million budget gap over two years and said it expected the reorganization to save more than $200 million annually. It recorded a $53 million one-time expense tied to the cuts in fiscal 2025.
Those moves helped. Mass General Brigham went from a $72 million operating loss (-0.4% margin) in fiscal 2024 to a $59 million operating gain in fiscal 2025. But the improvement left the system well short of its own target, and the Sept. 17 message asked physician leaders and managers to help identify the programs, processes and resources to cut or redesign next.
The post ‘Administrative savings alone will not be enough’: Mass General Brigham cuts more jobs amid $300M budget shortfall appeared first on Becker's Hospital Review | Healthcare News & Analysis.