Children’s Hospital Los Angeles Announces Major Layoffs Amid Financial Strains

Children’s Hospital Los Angeles (CHLA), a leading pediatric institution in the region, has initiated workforce reductions affecting nearly 6% of its staff as part of a strategic realignment to address worsening financial pressures.

Scope of Workforce Reductions

• Total positions affected: Approximately 439 roles—comprising about 5.8% of CHLA’s workforce—will be impacted by this downsizing initiative. 

• Of these, 253 employees across management, administrative support, and clinical care will lose their positions. 

• An additional 186 team members have been offered opportunities to transfer into restructured roles within the hospital. 

• Affected staff were informed this week that their roles will end on October 28, 2025, during which they will continue to receive full pay, benefits, and severance aligned with CHLA policy. 

Hospital’s Perspective

CHLA CEO Paul S. Viviano described the decision as “a very difficult” but necessary step to safeguard the hospital’s future. The restructuring is meant to preserve CHLA’s ability to deliver world-class pediatric care, advance medical research, and train future clinicians amid a challenging fiscal environment. 

A key driver behind the reductions includes steadily declining Medi-Cal reimbursement rates, which substantially impact the hospital’s budget. CHLA receives an estimated $700 million annually from Medi-Cal, accounting for about two-thirds of its revenue, alongside federal research grants. 

Broader Trends in Los Angeles Healthcare

While the hospital’s layoff announcement stands out, broader staffing challenges are emerging across the Los Angeles healthcare sector. A recent analysis by Becker’s Hospital Review notes other institutions—such as USC’s Keck Medicine of USC—have also filed notices impacting staff reductions. 

Meanwhile, debates persist on social forums about the complexities of healthcare funding, Medicaid reimbursement, and how these dynamics affect non-profit hospitals like CHLA. 

Children’s Hospital Los Angeles’s decision to reduce staffing reflects the growing financial challenges faced by healthcare institutions heavily reliant on Medi-Cal and federal funding. As the hospital navigates these pressures, those affected will be supported through pay, benefits, and severance as CHLA executes its strategic realignment to protect its mission of pediatric excellence.