After being laid off from his position as a special education teacher in 2011, Michael Simonton decided to become a registered nurse. Where he wanted to work: Keck Medicine of USC.
Simonton said he and his coworkers chose Keck to work with the best nurses in their profession, “taking care of the sickest people.” He has worked for the university for nearly 12 years and is currently an intensive care unit nurse at Norris Cancer Center.
“There’s something that feels really, really good about being able to take care of those people and to do good things for them, to save, to help them get better and to see them walk out of the hospital,” Simonton said in a recent interview.
Recent cuts to healthcare options and mass layoffs led Simonton to believe that USC is deeply prioritizing revenues over its employees.
“USC is really good at creating a facade. They’re excellent salesmen. They’re good at promoting themselves,” Simonton said. “Right now, I believe that they’re really focused on maximizing their profits.”
USC’s healthcare success is not just lucrative. It is the university’s largest source of income. In 2025, the university reported almost $3.2 billion in revenues for healthcare services. According to the USC 2025 Financial Report, those services accounted for about 42% of the university’s total revenues.
When accounting for expenses, the combined revenue surplus of USC’s hospitals in 2024 totaled over $500 million, according to its tax forms. The entire USC healthcare system has reported a surplus for three straight years.
Despite this success, the university has faced internal criticism in recent years over the treatment of its healthcare staff.
Nurses say working conditions have suffered, go on strike
Registered nurses from Keck and Norris began a weeklong strike Feb. 19 amid failed negotiations with the university over their healthcare contracts. This year, many nurses lost access to a no-premium healthcare option that allowed them to choose providers at hospitals over USC providers with out-of-pocket payments.
USC eliminated one plan with no premium and limited another with $0 deductibles. Many lost access to hospitals they previously visited, including UCLA and Cedars-Sinai Medical Center.
While nurses returned to work on Feb. 26, an agreement had not been reached by the time of publication.
The strikes closely follow 18 months of university layoffs. In a 2025 statement, then-interim President Beong-Soo Kim said USC’s $200 million budget deficit was due in part to “poor health system financial results” and “significant shifts” in federal aid for the hospitals.
An analysis of documents detailing USC’s layoffs showed that of the 1,133 employees USC has laid off since July 2024, almost a third — 402 of them — worked at Keck Medicine or its hospitals.
Of Keck Medicine’s $3.2 billion revenue, more than 80% comes from its hospitals.
Rudy Cuellar is a nurse at Keck Hospital’s intensive care unit. In the mid-1980s, his family immigrated from El Salvador to the U.S. while escaping the Salvadoran Civil War. His brother, mother and sister-in-law have all been nurses too.
“I guess it just runs in the blood, and that’s because we care for our patients,” Cuellar said in an interview. “We care for people. We’re passionate to care for the people who need it the most.”
Cuellar said when USC bought Keck Hospital from Tenet Healthcare in 2009, he and his colleagues hoped it would bring new opportunities for their profession. At first, Cuellar said the opportunities did enhance his work. He also said Keck’s dedication to nurses waned over time.
Cuellar is a member of the bargaining team for the California Nurses Association. He took part in the February strike.
“This is the third contract I’ve negotiated for the nurses, and this is by far the most difficult experience that we’ve ever had,” Cuellar said. “It seems like the hospital is making it much more difficult for the nurses.”
Decades of growth in revenues, months of loss in workers
Before layoffs started in 2024, USC had not permanently laid off healthcare employees en masse in the nearly two decades Cuellar has been employed by the university. According to USC’s first public financial report, from 1999, the university’s annual health care service revenues have increased by almost $3 billion in nearly three decades.
That year, the university reported $165 million in revenues for healthcare services. Adjusted for inflation, annual revenues have increased almost tenfold. On average, the university has grown its healthcare service revenues by $100 million every year.
Last July, Keck announced in a statement that it was laying off employees due to “significant, industry-wide challenges.” The statement said these challenges included “labor and supply inflation” and fewer patients.
Despite Keck’s statement that layoffs would “better position Keck Medicine to continue serving our community for years to come” and “maintain seamless patient care,” registered nurses and patients at Keck and Norris are still feeling the strain months later.
Cuellar said that while nurses face obvious hardships with layoffs, it is patients who will feel the consequences.
“If we are not able to take breaks in a timely manner, you are prone to make mistakes, and we work in a profession where we cannot afford to make mistakes,” Cuellar said.
Simonton said the decision conflicts with the healthcare workers’ mission: “It’s a people-first industry.”
“If USC is not going to put its own employees first, then we’re not at our peak in order to take care of those patients,” Simonton said. “It leads me to believe that they’re not taking patient safety seriously, that they’re not putting their patients first.”
Valerie Hernandez is a pulmonary specialty nurse at Keck and another member of the nurses’ bargaining team. She said while nurses were mostly spared from layoffs, their jobs became increasingly harder as USC failed to replace members of Keck’s “float pool,” a group of adaptable nurses employed by the hospital to fill staffing gaps across departments.
In her interview with Annenberg Media, Hernandez said she was actively finding coverage for her short-staffed coworkers.
“You don’t want to leave them high and dry,” Hernandez said. “A lot of times it’s hard to say no to that … We don’t want our unit to be left short.”
Staffing shortages are not only causing nurses to work overtime. Every nurse interviewed by Annenberg Media said staff frequently miss meals or skip breaks to provide care for patients who would otherwise not be seen by care providers.
The layoff documents also show that administrators overseeing these issues were laid off, including multiple staffing, nursing and patient coordinators.
When asked what necessitated Keck layoffs despite being USC’s most profitable arm, Keck referred Annenberg Media to its layoff statement from July.
Asked about the recent strike, Keck School of Medicine redirected Annenberg Media to a prior statement from February. The statement said Keck wanted to “reach agreements that are fair, provide competitive pay and benefits, and reflect our dedication and support of our staff.”
Keck did not answer whether it would put revenues toward meeting the strike demands of its nurses. Officials also did not respond to a question on how it tracks instances of nurses missing meals on shift to compensate them under the California Labor Code.
Cuellar said that if conditions do not improve soon for nurses, more strikes — for longer — are not out of the question.
Reflecting on her time negotiating as a nurse, and on behalf of her fellow nurses, Hernandez said through tears: “The more I work for this employer, the less hopeful I feel.”
While Hernandez said she wants to believe people in leadership roles will do the right thing, what keeps her inspired is seeing her fellow nurses “stand together and stand strong.”
“I remain hopeful in knowing that we will continue to stand up for our patients,” Hernandez said. “We will continue to stand united to push back against these massive takeaways and cuts to our healthcare and to our patients … That hope does remain.”