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Nov 13, 2008 7:30 am US/Central
UTMB To Lay Off 3,800 People
Regents Say Layoffs Designed To Save Galveston Teaching Hospital
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University of Texas Medical Branch-Galveston
The University of Texas Medical Branch in Galveston, still reeling from Hurricane Ike, is laying off some 3,800 people.
In a news release, the UT Board of Regents said it was forced to make the job cuts because the teaching hospital was running out of money.
"UTMB's current rate of expenditures, including the continuation of wages and benefits for faculty and staff who have not returned to work, exceeds revenues by almost $40 million per month," the statement said. "UTMB will deplete its financial resources and reserves in approximately three months, leaving the institution in the untenable position of having no funds to continue to operate."
Ike caused nearly $710 million in losses to UTMB when it hit the island in September and officials have said that only about $100 million of the damage is covered by insurance. According to The Galveston County Daily News, UT officials had not yet identified which employees would be let go but are planning to pay them through January.
UTMB has 12,000 employees.
The regents also ordered that "steps be taken to mitigate the impact of the reduction in force on affected faculty and staff, including priority hiring of qualified employees for available positions at other U.T. System institutions, assistance in placement of employees with other healthcare institutions and employers, and exploration of opportunities for retirement incentive packages."
Officials said the UT system did not have the resources to cover the UTMB's needs and could not use funds from the Federal Emergency Management Agency to pay for "operating expenses, or the payment of wages and benefits" at the medical facility.
Despite the layoffs, officials vowed to keep UTMB open.
"That school is going nowhere," Regent Colleen McHugh said in an online edition of the Austin American-Statesman. "We are going to keep UTMB on Galveston Island."
Ike blasted ashore near Galveston on Sept. 13, flattening buildings and killing at least 37 people in Texas. The storm is the most expensive in Texas history, with an estimated pricetag of $11.4 billion -- so far.
The monster storm was 600 miles wide when it hit land. It killed another 35 people on its drive across the country. And the shutdown of Gulf refineries caused gasoline shortages in Atlanta and elsewhere in the Southeast.
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