Thread regarding Rothman Orthopaedic Specialty Hospital layoffs

Rothman Orthopaedics is trimming its workforce by up to 5%, or about 90 positions, marking the physician group's second round of layoffs in the last year.

At the end of 2023, the Philadelphia region's largest specialty physician group focused on orthopedic care had a staff of about 1,800 physicians, administrators and support staff at more than 40 practice sites in Pennsylvania, New Jersey, New York and Florida. The round of cuts started this week.

Rothman would not comment on when the workforce reductions will be completed, but it did say the focus of the job cuts is on non-clinical positions.

Rothman said it is continuing to "navigate the challenges and opportunities" of a post-pandemic health care environment. The Center City-based practice said inflation, health care labor, and other costs of providing medical care are growing faster than reimbursement for health care services.

"After reviewing the market, it became clear that we need to shift resources where they appropriately align with our strategic vision of enhancing the patient experience," Rothman said in a statement to the Business Journal. "When market forces improve, we will be in a better position to grow our increasingly unique model. We believe that with these changes, Rothman Orthopaedics is positioned for sustainable success within an increasingly competitive musculoskeletal landscape."

Challenges facing the market have "resulted in four of the largest private orthopedic groups in the Philadelphia area selling to local health systems or private equity-sponsored entities in 2023," Rothman added, noting it is committed to staying independent.

Rothman, as a private organization, does not disclose specific revenue and income figures.

Last March, Rothman laid off 18 people in its corporate services department citing spiraling costs, inflation and the practice's need to decrease organizational expenses and streamline efficiencies.

In October, the Business Journal reported Rothman is planning to consolidate its Center City presence and relocating its headquarters one block east from 40,000 square feet of space at 925 Chestnut Street to 68,000 square feet of space at 833 Chestnut St. The move, expected to occur this spring, will put Rothman's administrative offices and clinical space under one roof.

Rothman is currently led by interim CEO Ed Tufaro, who took over the post after the practice parted ways with former CEO Dr. Christopher Olivia. Olivia was at the helm at Rothman for about two years following the 2021 retirement of longtime CEO Michael West, who led the organization for more than two decades.

Rothman and Olivia are currently involved in litigation. Olivia sued Rothman last year alleging he was wrongfully fired for exposing financial mismanagement, and Rothman countersued with claims that Olivia was dismissed for performance reasons and was not owed severance because he allegedly violated his employment agreement.

Rothman expansion efforts outside the Philadelphia region over the past few years has produced mixed results.

In an interview in October, Tufaro said Rothman's move into central Florida has gone well, while its entree into New York was progressing more slowly than expected. The practice, he said, also decided to exit Bergen County in North Jersey.