Hospital company KentuckyOne Health, which employs more than 14,000 people in Kentucky and southern Indiana, says it has laid off about 500 people to help reduce a $218 million deficit.
In addition, the company said it would not fill 200 job vacancies to further reduce costs.
Ruth Brinkley, CEO of Kentucky's largest health system, made the announcement Friday in a video posted for employees.
Brinkley said laid-off workers will get priority consideration for open positions, with some already transferring to other jobs within the organization.
Brinkley said the layoffs were necessary to help the company reverse financial losses and operate more efficiently.
Company officials would not say which positions were cut or break down layoffs by facility.
Before the layoffs, KentuckyOne had nearly 15,000 employees in Kentucky and southern Indiana working in more than 200 locations, including hospitals and physician offices.
Hospital systems across the country have begun slashing work forces to reduce bloated budgets after years of agressive building, while adjusting to lower Medicare reimbursement and reductions in Medicaid funding. In central Indiana, for example, Indiana University Health trimmed nearly a thousand workers late last year.