Cerner Layoffs 2019: 255 Lose Jobs By Nov. 5 Over Cost-Cutting Efforts

Cerner Corporation, one of the leading U.S. suppliers of health information technology (HIT) solutions and hardware, will fire 255 more employees to further cut down on costs in a radical transformation of its business. The employees will be let go on Nov. 5.

Cerner officials said the layoffs will occur in the Kansas City area and across the country. Cerner’s world headquarters campus is located in North Kansas City.

Cerner, the largest employer in Kansas City with a workforce of 14,000 people, is currently diversifying and reviewing its operations. CFO Marc Naughton said Cerner wants to slash more than $200 million in expenses. He said these cuts needed to be sustainable savings.

Naughton also said Cerner is working on 165 initiatives to slash costs and simplify the business in the name of optimization.

Analysts said Cerner is being forced to diversify since the market it now operates in is saturated by competitors. Cerner is looking for ways to diversify its business model and is currently engaged with third-party consultants in a comprehensive review of all current operations. Hence, the string of employee layoffs.

CEO Brent Shafer often refers to Cerner’s ongoing reconstruction as a “transformation.” He said Cerner had is taking a series of actions to drive efficiencies and promote long-term growth and profitability.

“Since introducing our new operating model earlier this year, we’ve made considerable progress in realigning the company in a more client-centric manner,” he said.

He pointed to savings, which include a recently completed buyout program offering a payout and benefits to a number of long-serving employees who agreed to voluntarily resign. He said Cerner spent some $40 million to bring this about.

“Certainly, we’re pleased to have gone through that,” said Naughton. “We’re pleased to start getting the benefits of that. But we’re certainly more excited about the benefits we’ll get from our additional optimization work.”

As part of this transformation, Cerner has restructured its board of directors and organized a finance and strategy committee to oversee efficiency and profit improvement efforts.

In 2018, Cerner earned $5.4 billion in total revenue, including $775 million in profit.

Despite the new firings, Cerner is hiring, and has hired several thousand new employees this year. It plans to hire hundreds more.