Thanks to the Trump Administration’s “Big Beautiful Bill,” which slashed Medicaid (Medi-Cal in California) by more than $900 billion over the next 10 years, according to the Congressional Budget Office [1], Alameda Health System (AHS) has been forced to slash its budget for the coming year. That means, in part, laying off 296 employees across the system, AHS said in a statement reported by Becker’s Hospital Review [2].
[3]“Due to these significant external cuts in funding, AHS must take a proactive approach to decreasing its organizational expenses, including labor expense,” the statement said.
The total annual budget for AHS is roughly $1.4 billion, according to its budget documents, KQED [5] reported. Officials said the system could face additional losses of up to $60 million per year due to federal funding cuts to states that pay hospitals who treat a large share of Medi-Cal patients.
AHS expects to lose “more than $100 million annually by 2030,” according to a statement quoted in the KQED report. “AHS projects that cash will run out by approximately August 2026 without immediate action,” the statement said. “In order to be proactive and ensure that AHS can continue to provide a range of emergency and comprehensive care, AHS has made the painful decision to reduce some services, reduce its workforce, and eliminate certain programs.”
The cuts will affect staff working in administrative services, clinical care, management, and support roles throughout the system, “creating significant concerns for patient care delivery and workforce stability,” according to a Nurse.org [6] report. “For AHS, where about 60% of patients are covered by Medi-Cal, California’s version of Medicaid, this is like pulling the rug out from under an already wobbly table.”
In a statement quoted by Becker’s, AHS said affected employees will be offered job search assistance and resume writing guidance. Unionized employees will receive severance packages.
“AHS leadership continues to pursue multiple strategies to restore funding and strengthen sustainability,” the statement said. “We are working in partnership with federal, state and county leaders to hopefully mitigate these adverse conditions. In addition, we have met with our labor leaders and hope to work in partnership to help us work through this very difficult time.”