Health IT Sector Sees Hundreds of Layoffs
Three companies in New Jersey, including major players in RCM and healthcare IT, announced a combined 354 job cuts. The layoffs reflect ongoing margin pressures, M&A integration challenges, and a broader need for operational agility across the health technology industry.
- The 354 job cuts include 134 employees from Cigna's Evernorth Services in Morris Plains, part of a global reduction of approximately 2,000 jobs by Cigna aimed at improving affordability and efficiency. - These layoffs are part of a larger trend in New Jersey's healthcare sector, which has seen the most job cuts of any industry in the state. Other recent reductions in the state's healthcare space include 572 workers at Optum and 242 at Horizon Blue Cross Blue Shield of New Jersey. - A major driver of workforce changes is the scaling of AI and automation across Revenue Cycle Management (RCM), with over 92% of RCM leaders planning to expand AI initiatives in 2026 to combat rising labor costs and denial rates. - The global RCM market was valued at $85.2 billion in 2025 and is projected to grow annually by 11.53% through 2034, driven by the need to manage complex payer rules and prevent revenue leakage. - While some companies are cutting staff, M&A activity in the Healthcare IT market remains strong, with a 26% increase in deal volume year-to-date in 2025 compared to the previous year, particularly for B2B solutions that address inflation and care costs. - In response to staffing shortages and cost pressures, 70% of hospitals and health systems are planning to expand their use of outsourced RCM services. - In contrast to the layoffs, RCM provider Waystar Holding Corp. reported a 24% year-over-year revenue increase in its fourth-quarter 2025 results and issued optimistic guidance for 2026, citing momentum in its AI-powered platform. - Another company, Conduent, replaced its CEO in January 2026, just three months after a restructuring that eliminated a management layer, following a 5% drop in third-quarter revenue and a nearly 60% decline in its stock price over the previous year.
