POTTSTOWN, Pa. – Tower Health said Friday it will lay off 350 workers, including 131 at Pottstown Hospital.

The cuts come as rising supply chain and labor costs, as well as reimbursement rates that have not kept pace with expenses, are creating significant pressure on health systems across the country, according to an internal message to employees from Tower Health President & CEO Michael Stern.

According to the internal message, demographic shifts such as a growing Medicare population, more uninsured patients, and evolving Medicaid policies have also posed challenges to the health care industry.

A Tower Health spokesperson said Pottstown Hospital will see the highest number of layoffs, with 131 people being let go. 

Multiple positions will be cut, including administrative jobs and nurses and clinical staff.

The spokesperson said he could not give exact numbers for Tower Health’s other two hospitals, Reading and Phoenixville.

He said Pottstown Hospital has seen layoffs because of low demand; it is seeing less patients than it could, well below its capacity, he said. 

According to a media release Friday, the changes reflect a strategic priority to reinvest savings in expanding its provider network, accelerating innovation through AI and technology adoption, and enhancing the overall patient experience.

Tower Health, in its message to employees, said almost all of the affected services will continue being offered at other sites within its network to ensure uninterrupted access to care.

The McGlinn Cancer Institute at Pottstown will wind down over 60+ days to ensure a smooth transition for patients, the spokesperson said. The McGlinn Cancer Institute will remain at Reading Hospital and Phoenixville Hospital, he said.

The health network says it is focusing on strengthening the Tower Experience as part of its three-year strategic plan.

“With a stronger financial foundation, Tower Health is well-positioned to be the provider of choice in every community we serve, meeting the evolving care needs of our patients today and in the future,” Tower Health said in its media statement.