October 27, 2017 / 1:13 PM / a month ago

Tenet Healthcare to lay off about 1,300 employees

(Reuters) - Tenet Healthcare Corp (THC.N) said on Friday it would lay off about 1,300 employees, or 1 percent of its total workforce, as the hospital operator looks to cut costs by $150 million in 2018.

FILE PHOTO: Trevor Fetter, CEO of Tenet Healthcare, speaks at the Reuters Health Summit in New York, May 7, 2013. REUTERS/Brendan McDermid

Tenet also estimated a third-quarter adjusted loss of 17 cents per share. Analysts on average were expecting a much bigger loss of 39 cents, according to Thomson Reuters I/B/E/S.

Shares of Tenet, expected to report its third-quarter results after the market closes on Nov. 6, jumped 8.9 percent to $14 in premarket trading.

The news about Tenet’s latest cost-cutting program comes a day after Reuters reported that the company has ended a process to try to sell itself, following the departure of its chief executive, Trevor Fetter, this month.

The company, which had a long-term debt of about $15 billion as of June 30, has been implementing cost-cutting programs focused on raising hospital segment margins to turn its business around.

“It (Tenet) has to start somewhere and this is as good a start as any,” Mizuho analyst Sheryl Skolnick wrote in a client note.

The Dallas, Texas-based company, which expects to save about 75 percent by eliminating its regional management layer, said it would also negotiate contracts with suppliers and vendors under the new cost-savings program.

Reporting by Divya Grover in Benagluru; Editing by Maju Samuel

Our Standards:The Thomson Reuters Trust Principles.
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