Cerner’s ‘transformation’ work continues with more layoffs in KC, across the country
Cerner Corp. will cut 100 positions, including about 50 in the Kansas City area, in a third round of layoffs for the healthcare IT firm.
The local cuts affect multiple departments, a spokesperson said. They follow September layoffs of 255 Cerner employees and November layoffs of 130 workers.
“As mentioned in previous earnings calls, Cerner continues to identify organizational efficiencies as we implement our new operating model. Part of that strategy includes a realignment of resources focused on key growth areas across the company,” spokeswoman Misti Preston said in a statement to The Star.
She said the company planned to hire 5,000 new employees by the end of 2020, including many positions in the Kansas City area. The workers who were notified of layoffs on Tuesday are eligible to apply for those positions, she said.
The layoffs come during a period of what CEO Brent Shafer frequently refers to as “transformation” for the firm that was founded in 1979 by Neal Patterson, Paul Gorup and Cliff Illig.
Based in North Kansas City, Cerner was long known for its explosive growth here and across the globe as it pioneered the work of digitizing paper health records. But the domestic market has largely completed the move away from paper records and Cerner and its competitors have saturated the market.
That has pushed Cerner to look for ways to diversify its business model and executives have undertaken a third-party review of all current operations. Last July, CFO Marc Naughton said the company was working on 165 initiatives to optimize costs and simplify the business as it sought to cut more than $200 million in expenses.
In an April quarterly investor call, executives reported that Cerner’s operating expenses were down 1% compared to the first quarter of 2019. That was attributed to the company’s “cost optimization efforts.”
As part of its transformation, Cerner has looked for opportunities to divest certain business segments and buy new ones.
In February, the firm announced plans to sell a software line used in Germany and Spain to CompuGroup Medical for about $247.5 million. Earlier this month, Cerner announced plans to sell its RevWorks business to R1 RCM.
Cerner reported first quarter revenues of about $1.41 billion, an increase of 2%. Executives said those revenues, slightly below the company’s expectations, were negatively impacted by the COVID-19 pandemic.
This story was originally published June 23, 2020 at 11:58 AM.
