East Bay health system averts layoffs as county approves $19.3 million lifeline
Alameda Health System, Alameda County's safety net healthcare provider, has rescinded its decision to lay off 92 employees - a cost-cutting move that doctors and other workers had decried for months - after the county allocated $19.3 million to avoid the cuts.
The county Board of Supervisors last month passed a budget for fiscal 2026-27 that includes $19.3 million to prevent the layoffs and extend a behavioral health program that had been slated to close.
The union that represents healthcare workers at Alameda Health System, SEIU 1021, called it a "major victory for public health."
Alameda Health System, which operates the flagship Wilma Chan Highland Hospital in Oakland, announced in December it would lay off about 250 employees, roughly 4% of its workforce, due to federal funding cuts to Medicaid laid out last year in the GOP's tax and spending megabill.
The plans included closing the outpatient behavioral health programs at Highland Hospital and Fairmont Hospital in San Leandro, which provide critical services for low-income patients with moderate to severe mental illness.
Dozens of physicians and other staff pushed back against the reductions, calling the decision hasty and dangerous for patient care.
In March, the Board of Supervisors voted to delay the layoffs and form a working group to consider alternative solutions. By June, the initial layoff target was reduced after negotiations among the hospital, the county and labor, and due to attrition, said a spokeswoman for Alameda Health System, which also runs three other hospitals and nine clinics in the East Bay.
The allocation will allow the behavioral health program, which had been slated to close in June, to continue through Oct. 31.
The Board of Supervisors approved the allocation at the recommendation of Supervisors Nikki Fortunato Bas and Nate Miley.
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This story was originally published July 10, 2026 at 1:36 AM.