Healthcare tech company Cerner has been quite busy in the past month. In under 40 days, the company has undergone major executive transitions, had another round of layoffs, and terminated a contract with a recent partner. On the flip side, Cerner has also managed to enter into several new, key partnerships to further advance the company in strategic initiatives.
In November, the company reported plans to lay off 131 employees in the U.S. to help increase operating margins by 20%, and cut $200 million in costs through the end of the year. This follows a previous round of layoffs back in September which cut over 250 employees.
The company has entered into several partnerships, including one with Uber Health, to provide scheduled, non-emergency transport for patients within the Cerner system. It also teamed up with The Department of Veterans Affairs who will use Cerner’s electronic health records (EHR) in 2020. However, there have been some initial concerns over the department transitioning from its legacy systems to this new platform.
Meanwhile, Pipeline Health is ready to roll out Cerner’s EHR over the next two to three years throughout its 25 clinics, 12 emergency departments, and seven hospitals. Additionally, home-based primary care provider, Vively Health, is on board with the EHR and has entered into a five-year partnership with Cerner. Kern Medical went live with Cerner’s EHR this fall after a 20-month transition to the new system.
Pertaining to innovation initiatives, the company expanded its partnership with Amazon Web Services to boost its AI capabilities and predictive technology.
On the personnel front, the company has pulled in 4,000 associates and will hire hundreds more within the next year. At the top, things have also shifted as two key executives at Cerner announced that they were stepping down. COO Michael Till, who spent 23 years with the company, announced he will depart in January 2020, while Jeff Townsend, Executive Vice President and Chief Innovation Officer, retired this fall.
The company also parted ways with partner Adventist Health back in October. The move was a “joint decision,” according to CFO Marc Naughton and will reduce the company’s annual revenue by $170 million but should not impact earnings.
In the third quarter of this year, Cerner reported revenue of $1.43 billion, which is up 7% from the same time last year and anticipates $1.41 to $1.46 billion in the fourth quarter. The company’s services revenue also helped drive revenue at $507.46 million this past quarter.