HOUSTON -- MD Anderson has announced that 800 to 900 Houston employees will be laid off.

The layoff plan will impact less than 5% of the roughly 20,000 person workforce. Twelve-percent of the affected staff hold management or leadership roles.

"This is a very sombering day for all of us," said MD Anderson President Ron DePinho.

Physicians and in-patient nurses will not be involved in the reduction plan.

"I can assure you, during the last several months and more recently during the decision-making process, great effort and compassion have gone into exploring all options to make sustainable changes and to avoid impacting our treasured colleagues," DePinho said.

The layoffs go into effect this week.

Employee notification began Thursday morning and will continue into next week. The world-renowned cancer cancer is expecting to save $120 million per year with the cuts.

"MD Anderson’s long-term financial health remains strong. These actions will not impact patient safety or quality of care," a statement from the hospital read.

DePinho cited rising "national healthcare costs, progressive reduction in reimbursement of care and expanding healthcare needs due to an aging America" as reasons for the financial struggle.

The news came as a surprise to MD Anderson patients like Deborah Harvey.

"That's really unbelievable," Harvey said. "That's sad because this is a really a good place, and I would hate to see people lose their jobs."

Officials say a lot of the workers they're letting go had been brought in ahead of the launch of the hospital's electronic health record system last March.

A system they say will save time and money in the long run, but is costing them too much up front.

"Now that we're on the other side of it, perhaps we staffed up more than we should have," said administrator Dan Fontaine.

According to its website, "the University of Texas MD Anderson Cancer Center is one of the world’s most respected centers devoted exclusively to cancer patient care, research, education and prevention."

The center's main location is in the Medical Center but it also operates out of smaller clinics in Katy, the Bay Area, Memorial City, The Woodlands and Sugar Land.