Erlanger is preparing for middle management layoffs.

Erlanger Health System has begun laying off managers and directors this week in the second phase of a labor management plan to cut costs, employees were told Wednesday.

In an inter-office memo to employees, Erlanger officials said they would provide additional information in coming days. The memo did not say how many positions will be affected.

"We understand that these departures will be difficult, both for those affected and for their employees," the message stated.

Erlanger has lost $10.3 million in the last six months, primarily because of lower surgery numbers, officials have said.

In January, the hospital cut six executive positions, reducing its executive staff from 15 to nine. Three executives, including the former CEO, were given a total of nearly $1 million in severance packages.

This week, the hospital began voluntary and involuntary layoffs of managers and directors.

Staff layoffs will be the third phase of the plan, the memo stated.

Some departments also have required all full-time employees take 12 days off before March 1, using their paid annual leave. The time off and layoffs will save the hospital millions of dollars, officials have said.

The goal of the multiphase plan is to start the next fiscal year -- July 1, 2012 -- without a deficit, officials said.

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