MDH Lays Off 170, Warns Of Service Disruptions After Feds Yank $220M

ST. PAUL, MN — The Minnesota Department of Health said Tuesday that it sent layoff and separation notices to 170 employees whose positions were funded by recently terminated federal grants.

Additionally, "at risk" notices will be going to MDH staff at risk for layoffs due to seniority rules around layoffs, officials said. A total of about 300 various notices are going to MDH employees on Tuesday.

And about 20 employees slated to start with the department in the last week have had their offers rescinded, according to officials.

The layoffs are a direct consequence of the "unprecedented and unexpected action" by the Trump administration last week to cut more than $220 million in previously approved federal funding for the state, MDH said.

The layoffs will impact services across the agency, according to health officials, including those that support the state’s response to measles and H5N1, wastewater surveillance, the state’s public health laboratory, and community clinics and vaccination efforts

"We are working now to figure out how much of this critical public health work we can save and continue," said Minnesota Commissioner of Health Dr. Brooke Cunningham in a statement.

"The sudden and unexpected action from the federal government left us with no choice but to proceed with layoffs immediately. It is devastating to be forced to reduce critical services and give notices to so many dedicated public health professionals because the federal government decided to renege on its commitment to our state. They left us in the lurch, with no advance notice, no close-out period, halting work that would have helped us address chronic gaps in the system and be better prepared for future threats."

MDH said the impact of the cuts includes:

• Significantly reduced support for nursing homes, including funding for HVAC upgrades and staff training around disease prevention, as well as support for county jails and other congregate settings.
• Slower response times to infectious disease outbreaks.
• Immediate suspension of partner-led vaccine clinics and emergency preparedness activities.
• Reduced laboratory support for hospitals and health care systems that could delay lab results and patient care.
• An inability to upgrade the Minnesota Immunization Information Connection, the state’s immunization information system, which means it will remain outdated.
• Suspension of the INSPIRE Program, a program to get middle and high school students excited about and interested in public health.
• Reduced funding for Tribal Public Health.

Nationwide impact

The Trump administration rescinded $11.4 billion in COVID-19-related funding for state and local public health departments and health organizations nationwide, local officials learned last week.

Following the news on Wednesday, the Minneapolis Health Department announced it must immediately shut down its free vaccination clinics and halt all immunization outreach.

The federal grants to Minnesota and other states were used to fund things as infectious disease tracking, immunization clinics, mental health services, addiction treatment, and other emerging health needs.

State health departments began receiving notices about a week ago that funds allocated during the COVID-19 pandemic would stop immediately, according to the story first reported by NBC News.

The action cancels an $11.4 billion grant from the Centers for Disease Control and Prevention and around $1 billion from the Substance Abuse and Mental Health Services Administration.

“No additional activities can be conducted, and no additional costs may be incurred, as it relates to these funds,” the notices said.

The Minnesota Department of Health said Thursday that "the federal government has unilaterally terminated approximately $226 million in grants."

"Abrupt terminations of grants and contracts is unprecedented and will impact our work and that of our partners," MDH added.

"Every dollar rescinded had been thoroughly reviewed and approved for its intended purpose by the federal government. In the past we could count on the federal government to uphold its commitments and obligations. When changes are necessary, the federal government typically gives sufficient notice to plan and pursue other sources of funding to ensure that the work to protect the health of Minnesotans continues uninterrupted and does not put our residents at risk. It will take time to figure out all of the impacts of this action, but these cuts are a tremendous loss."

HHS Cuts 10,000 Workers

The cuts to states were a prelude to sweeping changes to the Department of Human Services. On Thursday, the Trump administration said about 10,000 HHS employees would be laid off under Health Secretary Robert F. Kennedy Jr.’s planned agency reorganization, a move which the administration said will save taxpayers $1.8 billion per year.

HHS oversees 13 agencies, including the Centers for Disease Control and Prevention, Food and Drug and Administration, and the National Institutes of Health.

Kennedy said the 28 divisions within the 13 agencies overseen by HHS will be consolidated into 15 to eliminate duplications of work.

“We will eliminate an entire alphabet soup of departments, while preserving their core functions by merging them into a new organization called the Administration for Healthy America or AHA,” Kennedy wrote on X.

About 2,400 CDC employees will be cut. Divisions that will be eliminated include those focused on global health, domestic HIV prevention, and prevention from injury, such as gun violence, NBC News reported.

When combined with HHS’ other efforts, the restructuring results in a total downsizing from 82,000 to 62,000 full-time employees, according to a news release announcing the cuts.

As part of the makeover, Kennedy plans to create a new division, the Administration for a Healthy America, which will be known by the acronym AHA, the news release said.

The cuts are in addition to the 10,000 people who took buyout offers and left on their own after President Donald Trump took office.

Those cuts are on top of what is expected to be a wave of public health staff layoffs across the country as federal grant funding is cut off.

“The reality is that, when we take funding away from public health systems, the systems just do not have the capacity, because they’re chronically underfunded over the decades,” said Dr. Umair Shah, who served as Washington State’s health secretary until January, told The New York Times.

This is a breaking news story.