Health Care

Cerner to lay off 150 workers next month

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New Cerner CEO Dr. David Feinberg on Thursday told employees that a set of layoffs will take place in November, a company spokesperson confirmed to Modern Healthcare.

Feinberg, who took the helm as Cerner’s CEO on Oct. 1 following nearly three years leading Google Health, sent an email to employees Thursday evening after noticing a comment on Reddit, according to the Kansas City Star, which first reported the news. The Reddit commenter had said they were a company employee that recently learned they would be laid off.

“You will always get transparency from me,” Feinberg wrote in the email, according to the Kansas City Star. “Although I would have liked to be the first to inform you, I can confirm, in early November, approximately 150 positions will be eliminated from their roles at Cerner. These actions are never easy.”

Cerner did not respond to questions regarding what departments would be affected in the November layoffs or what prompted the layoffs.

“Our CEO informed Cerner colleagues yesterday of a small reduction that will occur next month,” the spokesperson wrote in an email. “More details will be provided at a later date.”

The Reddit user—who said they were a lead project manager at Cerner—on Wednesday posted in the Cerner subreddit that their boss had said they would be laid off the first week of November. The Cerner subreddit is an online community where Reddit users, mostly Cerner employees, post about the company.

The commenter said their boss had mentioned outsourcing.

“He told me this is part of a large layoff and that he can’t do anything about it,” the Reddit user wrote. “I don’t know what I am going to do.”

In another post Wednesday, a separate Reddit user said engineers on their team had been reassigned to other teams, while their work was outsourced overseas.

A Cerner spokesperson did not immediately respond to a request for comment on the company’s outsourcing plans.

Cerner has conducted several rounds of layoffs since 2019, as company executives have worked to cut costs and strengthen the organization’s operating margins. In July, executives told investment analysts that Cerner had taken steps like eliminating jobs, office space and products to achieve those goals.

That included reducing workforce by roughly 500 people and eliminating around 300 open positions—providing an estimated $50 million in annual savings, an executive said in July.

Cerner is targeting an adjusted operating margin in the mid-20% range by 2024.

Cerner’s adjusted operating margin was 21% in 2021’s second quarter, compared to 18% a year ago. Cerner plans to post its third-quarter financial results next week.

Cerner in July reported $1.5 billion in second-quarter revenue, up 9.5% from $1.3 billion in the year-ago period—the period during which Cerner’s business was most affected by the COVID-19 pandemic. The company reported $49.6 million in operating earnings, down 66% from $146.9 million in the second quarter of 2020.


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