Beacon Health System Ends Contract with Compass Group USA, Bringing Services In-House at Multiple Facilities

*KALAMAZOO, Mich.* — More than 250 contracted workers employed at various Beacon Health locations across Southwest Michigan will lose their jobs come July 1, according to a report from the Michigan Department of Labor and Economic Opportunity (LEO).

Compass Group USA, Inc. is laying off 262 workers employed at the following facilities owned by Beacon:

  • Beacon Allegan
  • Beacon Health & Fitness Center in Kalamazoo
  • Beacon Kalamazoo
  • Beacon Dowagiac
  • Beacon Plainwell

LEO received the Worker Adjustment and Retraining Notification (WARN) letters from Compass Group USA, Inc. earlier this month. The reason for company action listed in four of the five WARN letters — excluding Beacon Lee Hospital — read: Compass Group USA, Inc. recently that its contract to provide services to Beacon Health and Fitness Center will be coming to an early termination due to the sale of the client's business. This event will, unfortunately, result in the closure of our entire operations at this account and directly impact our staffing.

The reason for company action within Beacon Lee's letter states early termination of service "due to sale of client's business; permanent layoff."

Beacon Health Bringing Services In-House

A spokesperson with Beacon Health System sent News Channel 3 the following statement Monday afternoon:

Beacon Health System is bringing nutritional, environmental and transport services in-house at Beacon Kalamazoo, Beacon Allegan, Beacon Dowagiac and Beacon Plainwell hospitals, as well as Beacon Health & Fitness Kalamazoo, effective July 1, 2026, upon conclusion of an agreement with Georgia-based TouchPoint Support Services, a division of Compass Group USA.

The layoffs impact a wide range of essential services at these facilities, including:

  • Food service workers
  • Cooks
  • Patient services staff
  • Retail managers
  • Dieticians
  • Housekeepers
  • Administrative assistants
  • Custodians
  • Supervisors

What This Means for Workers

The 262 employees, who work for TouchPoint Support Services and parent group Compass Group USA, are being laid off as Beacon prepares to bring these services in-house. This represents a significant shift in how the locally-owned hospital system operates, moving away from contracted third-party services to directly employed staff.

Beacon Health & Fitness Center in Kalamazoo will face closure of operations at this account due to the sale of the client's business, according to the WARN letter. This particular facility appears to have been sold, which explains why its operations are being terminated.

Community Impact

This restructuring affects workers across multiple communities in Southwest Michigan, including Kalamazoo, Allegan, Dowagiac, and Plainwell. The layoffs come as Beacon Health System continues to expand its services and bring more operations under direct management.

The transition will take effect on July 1, 2026, giving workers and the company time to plan for the change. Beacon Health has indicated they will be bringing these services in-house at their major hospital facilities, which may create new job opportunities with Beacon as direct employees rather than through the contractor.

Context: Beacon Health System

Beacon Health System is a locally-owned hospital system serving Southwest Michigan with facilities in Kalamazoo, Allegan, Dowagiac, Plainwell, Lee, and other communities. The system has been expanding its services and recently earned national recognition for patient safety and emergency room upgrades.

The decision to bring services in-house represents a strategic move by the locally-owned system to have more direct control over these essential healthcare operations and potentially improve service quality through direct employment.

What's Next

The investigation into the WARN letters and the reasons for Compass Group USA's departure is ongoing. Anyone who may have witnessed the situation or who has information on the layoffs is asked to contact KDPS Criminal Investigations at 269-337-8139. Anonymous tips can be submitted through Kalamazoo Silent Observer at 269-343-2100, via the P3Tips app, or online at kalamazoosilentobserver.com.

"We are heartbroken by the tragic loss of Mark, a beloved son, brother, father, grandfather, friend, and member of the Kalamazoo community. Mark was the kind of person who showed up for others without being asked; someone who led with kindness, generosity and a genuine care for the people around him." — McBride's family

"He was a hard worker with an incredible sense of humor, and he had a way of making people feel seen, valued and at ease. His absence leaves an immeasurable void in the lives of all who knew him." — McBride's family

"His family is grieving this unimaginable loss and asks for privacy as we navigate the days ahead." — McBride's family