04:18 PM CDT on Tuesday, June 20, 2006

From 11 News Staff Reports & The Daily News

Layoffs are looming at Galveston's largest employer. 11 News has learned the University of Texas Medical Branch will cut up to 1300 pink slips beginning next month.

Only about 15 percent of the cut will come through attrition, which means about 850 people will be getting pink slips, UTMB President Dr. John Stobo said.

The reduction of almost 10 percent is part of an attempt to stem operating losses of about $20 million a year and help the university build a reserve fund.

The university employs about 13,000 people who reside all over the region. The university had contracted with the Chicago firm Navigant Consulting to analyze what the institution and its workers do and recommend improvements and efficiencies.

In a letter to employees, Dr. Stobo said the layoffs are necessary to cut costs and boost revenue.

Excerpts from Dr. Stabo's letter:

"Given the fact that salaries and benefits account for 70 percent of our expenses, there's no doubt that faculty and staff positions will be affected. The Navigant group has proposed a target in the neighborhood of 1,300 full-time equivalents (or FTEs). However, until the SEC has evaluated the entity leaders' plans, there's no way to say precisely how many positions will be affected or in which areas."

"What we do know is that there will be no across-the-board cuts or freezes, and that we will be able to achieve some of this reduction through unfilled positions, as well as routine turnover and retirements. I know that the likelihood of a reduction in force has been the cause of greatest concern among the campus community and realize the months to come are going to be difficult for everybody. For this reason, we have pledged to make and implement personnel decisions as quickly, compassionately and fully as possible so no one will be left worrying and wondering for long. Our plan is to notify the majority of faculty and staff whose positions will be affected no later than September 1."

Other plans designed to improve the university's financial health include:

•Increasing the portion the $1.4 billion annual income for research from 10 percent to close to 20 percent.

•Increasing the number of patients with private insurance. Currently, 85 percent of the institution's income from patients comes from such government sources as Medicare, Medicaid and the state.

With those sources expected not to keep pace with medical inflation, UTMB is seeking to find more patients with private insurance, which pays better.