Hundreds of Healthcare Support Workers Face Job Loss as Beacon Health System Moves Operations In-House

*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).

The layoffs stem from Compass Group USA, Inc. ending its contract to provide food service, nutritional, environmental, and transport services to Beacon Health facilities. The hospital system is bringing these services in-house at multiple locations, a move that will directly impact hundreds of employees.

Facilities Affected by the Layoffs

Per the LEO report, Compass Group USA, Inc. is laying off 262 workers employed at the following Beacon Health facilities:

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

What Jobs Are Impacted

The WARN letters received by LEO indicate that the layoffs will affect a wide range of positions, including:

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

One of the WARN letters noted that for four of the five facilities, the reason for the company action is that Compass Group USA, Inc. determined 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. The letter for Beacon Lee Hospital stated early termination of service "due to sale of client's business; permanent layoff."

Beacon Health System Statement

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.

The hospital system is encouraging displaced employees to apply for positions once the in-house operations begin.

Timeline and Next Steps

LEO received the Worker Adjustment and Retraining Notification (WARN) letters from Compass Group USA, Inc. earlier this month, with the layoffs set to take effect on July 1, 2026.

The WARN letter for Beacon Health & Fitness Center specifically stated:

Compass Group USA, Inc. recently determined 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.

Impact on Local Workers

The layoffs represent a significant disruption for workers in Kalamazoo, Allegan, Plainwell, Dowagiac, and surrounding communities who have relied on these positions for their livelihoods.

Many of the displaced workers will now face the challenge of reapplying for positions as Beacon Health brings these services in-house. The hospital system has indicated it will be hiring for similar positions once the transition begins.

Questions Remaining

As the situation unfolds, questions remain about:

  • What specific roles Beacon Health will fill with in-house staff
  • How many of the displaced workers will be rehired
  • What the long-term impact will be on patient services and operations

The Michigan Department of Labor and Economic Opportunity will continue to monitor the situation as the July 1 deadline approaches.

About Beacon Health System

Beacon Health System is a nonprofit health system serving Southwest Michigan with multiple hospitals and healthcare facilities. The system provides comprehensive care to communities across Kalamazoo, Allegan, Van Buren, and Allegan counties.