NORTH KANSAS CITY, MO (KCTV) -- The Cerner Corporation announced Thursday that it is laying off hundreds of people. Employees contacted KCTV5 indicating they received their notices.
Cerner touts itself as the KC-metro’s biggest employer and says it will still be after this.
North Kansas City-based health care IT firm Cerner Corp. says they are currently going through a reduction of their workforce.
“It’s a tremendous impact on our economy,” said Tony Tocco, Ph.D., a professor of accounting at Rockhurst University’s Helzberg School of Management.
He was talking about the impact of a multi-billion-dollar Fortune 500 company being in the Kansas City area, generating tax revenue and trickle-down business from all of its employees. As for the impact of the layoffs, he said it depends.
“What will it mean to the Kansas City economy? It will be minuscule,” Tocco said. “What would it mean to the individual families? It’s going to be significant.”
Cerner announced it is laying off about 500 employees worldwide. The company’s spokeswoman, Misti Preston, wouldn’t give a local number. She indicated Cerner currently has 26,000 employees globally and 13,000 in the Kansas City metro. Preston emphasized that the company did not file a WARN Act notice with the Department of Labor. Such notices are required in the event of a layoff that involves 50 or more full-time employees per location (or at least a third of its full-time employees).
Cerner entered the medical software scene decades ago then expanded in recent years to a total of four campuses across the metro.
A big boost came when the federal government required all paper medical records to go digital, but Tocco noted that upfront cost is over.
“Once you got the hospital, now you’re still making some money off the hospital, but you’re not making as much as when you initially got the hospital,” he explained.
Tocco said that means Cerner needs to expand from the hospital side of the healthcare tech equation.
“One of new areas the Cerner is really trying to get into is personal health,” Tocco remarked.
The addition of a consumer market, he said, means collecting data on people and finding employees with a skill set to translate that.
“I bring in my business intelligence and analytics team to take all that data and turn it into information, and I sell it to everybody else,” Tocco speculated.
Cerner issued the following statement about the layoff event:
Cerner remains committed to positioning the company for future success. We are focused on delivering a higher order of benefits for clients, associates and shareholders. Our recent actions demonstrate our continued enterprise-wide transformation work - ensuring we more efficiently deliver value to clients and set the company on a path to long-term, profitable growth.
Tocco was reminded of something heard a CEO of a different company once say.
“You go into battle to win. You know you're going to lose people. But overall, you know, it's for the betterment of everybody,” Tocco paraphrased.
Preston said Cerner is “on track” to add 2,600 new jobs in the Kansas City area in 2021. She would not specify what severance Cerner is offering.
Employees who contacted KCTV5 said they are getting paid to continue working for 60 days, then getting 2 weeks’ severance for every year of service.