Kaiser Permanente downsizes regional HQ, relocates 1,200 employees to cut costs

Kaiser Permanente downsizes regional HQ, relocates 1,200 employees to cut costs Caroline Hudson

Kaiser Permanente is relocating 10% of its workforce, or about 1,200 employees, from its regional headquarters in Oakland, California, as part of a larger office consolidation plan, the system confirmed Thursday.

The integrated nonprofit said it will move the employees to its Pleasanton campus in early 2024, significantly reducing annual costs. Most of the administrative employees at Kaiser's regional office will continue to work remotely. The main headquarters will remain in downtown Oakland, where other national employees will be centralized.

Kaiser, which had more than $95 billion in 2022 operating revenue, declined to say how much money the consolidation would save. It operates 39 hospitals and more than 730 medical offices across eight states and Washington, D.C.

"Like many organizations, Kaiser Permanente is responding to changes in how and where employees have been working since the COVID-19 pandemic profoundly changed the world. Across our organization, we have shifted to a hybrid model that includes a combination of on-site and remote work. As we continue to support remote and flexible work, our need for physical administrative space is significantly reduced and we are right sizing our campuses," Kaiser said in a statement.

This isn't Kaiser's first attempt at consolidation. In 2019, Kaiser announced plans for a $900 million, 1.6 million-square-foot headquarters tower in downtown Oakland that would've brought thousands of employees from seven East Bay offices under one roof. However, it scrapped those plans in early 2020, citing "delays and increasing costs."

Kaiser faced substantial financial losses in 2022 as the industry continued to grapple with rising costs. It reported a $4.5 billion loss last year, compared with a $8.1 billion gain in 2021. Annual expenses rose 4.5% to $96.7 billion. Kaiser lost $3.2 billion due to poor performance in the financial markets.