Providence is further reducing its office space in support of remote work. According to a report from CBRE in the second quarter, the Renton-based hospital system has vacated over 174,000 square feet of space at 800 Fifth in downtown Seattle. A spokesperson for Providence stated that this move aligns with their commitment to a “flexible work model strategy.”
Melissa Tizon, the spokesperson, explained, “Since many of our administrative caregivers are continuing to work virtually or a hybrid of in-person and virtual, we no longer need as much office space.” This decision comes half a year after Providence sold its Renton headquarters to Seattle Children’s Hospital, with a partial leaseback of the campus. Like many other hospital systems across the country, Providence has pursued various cost-cutting initiatives due to significant operating losses resulting from rising labor costs and stagnant revenues, according to a report in the Puget Sound Business Journal.
Last year, hospitals in the state incurred losses totaling nearly $3 billion. In the quarter ending March 31, Providence recorded a deficit of $345 million. Providence Swedish, the provider’s division in the Puget Sound region, reported an operating loss of $81 million for the quarter, which was the second-largest among all Providence markets, surpassed only by its Southern California business.
Apart from downsizing office space, Providence has also eliminated several executive positions and scaled back certain services. This includes the closure of a 16-bed inpatient hospice unit in Everett. Other hospital systems have resorted to larger-scale layoffs primarily affecting non-patient-facing staff.
The exact number of Providence employees based at 800 Fifth is unclear. Tizon stated that Providence still maintains space in multiple downtown locations, including four floors at Met Park, a three-building property in Seattle along Interstate 5 and Minor Ave.