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With no cash infusion, LBJ set to lay off 200 workers

Faced with “a lack of funds”, LBJ Medical Center chief executive officer Michael Gerstenberger has informed many workers at the hospital they are being laid off effective Feb. 19 for an “indefinite period of time — we believe less than one year.”

Samoa News understands that the total number of affected employees is around 200 workers, of which many are medical personnel, including about 20 physicians, more than 60 nurses and several technicians at the laboratory.

Information received by Samoa News revealed that letters were delivered yesterday to the affected employees, but the total number could not be confirmed, as Gerstenberger didn’t respond to Samoa News questions as of press time.

“Your selection to be included in this furlough was made strictly according to Personnel Policies and is in no way a reflection of your performance nor your importance to the Medical Center,” wrote Gerstenberger in the termination letter given to one employee that Samoa News was able to obtain.

In accordance with the furlough provisions of LBJ’s Personnel Policies, those employees who are furloughed may be called back to work according to their retention standing within their job class, the letter states.

Retention standing is largely determined by seniority: for instance, permanent employees will be called back to work before temporary employees and a permanent employee in the same class who has five years of LBJ service will be called back before a permanent employee in that class who has three years of service, the letter further states.

According to Gerstenberger’s letter, the laid off employee will be granted preference for reemployment or transfer to any vacant unfurloughed position “for which you qualify”.

“Due to our financial situation, we are unable to pay accrued annual leave. The amount of leave you have accrued will be frozen and will either be activated when you are recalled to work or paid out at your discretion when our financial position permits,” said Gerstenberger.

“I very much regret that our financial position makes this action necessary. It is my hope that we can convince the government to provide the necessary financial assistance so that this furlough does not occur, but today we have not received the money that our current level of operations requires,” he added.

Gerstenberger had told the media that they would run out of cash in two weeks. The LBJ board had already informed the governor that they are in dire need of financial help or would not be able to meet payroll and pay vendors by Feb. 22.

The layoffs were first hinted at by Rep. Larry Sanitoa during the House session on Monday, when he said that the LBJ urgently needs cash to meet its financial obligations, and he had been informed by hospital staff that the medical center management was planning to lay off staff if no fast cash infusion is provided by the government.

Sanitoa later told Samoa News that Gerstenberger has stated several times that the additional funding is needed by the hospital or one of the options is a layoff. “The CEO has been very clear about the hospital’s financial needs,” he said.

At yesterday’s House session, Rep. Taotasi Archie Soliai told his colleagues that he has received information from hospital personnel that the layoffs are to take effect Feb. 19 and information he has received indicates that a list of employees affected has been distributed  to department managers.

He said his concern is that the hospital didn’t take into consideration people who were to be laid off. For example, he points out that a long time employee, a male, is the only breadwinner for a family of six, and his wife had lost her job last year.

“LBJ is not taking these types of situation into consideration when making their final decision,” Taotasi later told Samoa News, adding that information he has received states that a management meeting was held Monday where the list of employees to be laid off was provided by Gerstengerber and another top LBJ official.

He said the list was given to managers in the meeting. “Managers had no input prior to the list being distributed,” he said and noted that the layoffs include “essential medical personnel”.


The governor’s bill to dissolve the LBJ medical authority was taken up in yesterday’s House session, while the Senate made no mention of it in their session.

Also, the $3 Million of immediate cash infusion for the hospital continues to be stalled in the Fono, while the Senate and the House, in a Fono Conference Committee hearing, try to resolve differences between them the funding bill.

More LBJ stories in today's edition.