Facing bankruptcy and a widening accounting fraud investigation, HealthSouth Corp. has cut 165 jobs at its headquarters on U.S. Highway 280 in Birmingham.
The troubled health care giant employs about 50,000 people at 1,700 hospitals and physical therapy centers across the nation. Thursday’s action eliminates 20 percent of HealthSouth’s corporate staff, leaving it with 3,335 local employees, 665 of them at its U.S. 280 campus.
The cuts are all non-clinical positions administrative, clerical and support jobs and will not affect patient care, according to spokesman Andy Brimmer. Brimmer says HealthSouth will provide severance benefits and try to place its former employees with local companies, although it will not offer transfers to other HealthSouth locations.
The move comes amid federal charges that former HealthSouth CEO Richard Scrushy and other officers falsified $1.4 billion in earnings since 1999 to meet Wall Street expectations and fatten their own wallets. Three financial executives already have pleaded guilty in the case; five more employees were charged Thursday and are expected to do the same.
HealthSouth also eliminated 1,000 jobs late last year. Brimmer could not say if more layoffs were in the works or whether the company would be able to pay severance if it declares bankruptcy â€“ something it might do after missing a $367 million bond payment this week.