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Mediclinic freezes hiring and cuts jobs — AI strategy aims for R2bn in savings

Mediclinic freezes hiring and cuts jobs — AI strategy aims for R2bn in savings
Lindsey Schutters
By Lindsey Schutters
15 Apr 2025
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Mediclinic plans to slash jobs as part of an aggressive artificial intelligence and automation strategy aimed at saving nearly R2bn by 2027, according to the strategy revealed at Remgro’s recent Capital Markets Day.

Mediclinic hospital group, which was acquired by Remgro in May 2023, has put a freeze on “nonessential new hires” and is offering severance packages as it turns to AI to “revolutionise operations” across its facilities.

This workforce reduction forms part of a broader target operating model that aims to deliver about $100-million (roughly R1.8-billion) in annual savings over three years, from FY25 to FY27, with automation initiatives expected to contribute significantly to these cost reductions.

Mediclinic appointed Bertrand Levrat as group chief operating officer in June 2024. He has seemingly been brought on board to spearhead the new strategy. 

“We have put a freeze on all new recruitments in the group,” Levrat told investors, explaining that while the freeze excluded nurses and doctors, all admin roles were affected.

“In parallel, for SA-based corporate office people and shared services people, we have offered early retirement packages... These (cuts) will enable us to reduce the administrative costs of the group.”

His experience in implementing AI systems in hospital settings appears central to Mediclinic’s transformation strategy. During his tenure at Geneva University Hospitals (GUH), Levrat oversaw AI applications in areas such as administrative task simplification and patient flow optimisation – precisely the areas where Mediclinic is now targeting efficiency gains. 

Hard pivot 


Despite the planned job cuts, Mediclinic reported a strong financial performance for the six months ended 30 September 2024, with group revenue increasing by 6% to $2.34-billion (R44.3-billion) and adjusted earnings (Ebitda) rising 13% to $323-million (R6.11-billion). 

The transition to AI-driven operations comes as the hospital confronts what it describes as a “rapidly changing healthcare landscape, characterised by medical innovation, decreasing affordability and evolving population factors.”

The company has established a dedicated AI, data and automation team under its chief data officer, focusing on immediate implementation of technologies that promise the greatest returns. 

Documents show that robotic process automation (RPA) is already performing “significant hours of work annually” in back-office shared services, “leading to cost reduction through staff efficiency”. Additional automation initiatives include predictive systems to reduce client no-shows and automated coding and eligibility checks.

mediclinic ai

 The great replacement


Mediclinic’s move reflects a broader shift in how AI is disrupting workforces across industries. Sashen Naidu, global vice-president for customer experience services at NTT, told Daily Maverick about the dramatic impact of automation on staffing needs. 

“You have fantastic use cases that can reduce people costs by 60% or 70%,” he said in a broader conversation about the transformative effect of AI. “A lot of the transactional capabilities are going to be handled by AI agents. We’re already seeing that right now. But there’s a shift in terms of the agents to handle far more complex queries.”

Naidu illustrated the cost efficiencies driving these changes: “A typical transaction is around four to six minutes... we’re talking about a significant decrease in costs” when comparing AI solutions to human workers. 

Robin Fisher, head of Europe, Middle East and Asia growth markets for Salesforce, revealed at the company’s Agentforce conference that businesses were reconsidering their hiring strategies:

“It’s going to be really critical that the agents we use are adding value because that’s a nice problem to have, your need to hire personnel – in a call centre, you don’t want to constantly hire low-skilled people – that costs the company a fortune.” 

What this means for you


Companies are using AI to cut staffing costs by up to 70%. AI will handle seasonal peaks, reducing the need for extra staff. Small businesses can use AI to operate efficiently without full departments.

Mediclinic says it is using AI to balance cost savings with improved patient care, managing the transition responsibly and supporting affected staff.


It’s all about scale 


The implications for businesses that experience seasonal peaks are particularly stark.

“When peak season’s there, we have no human impact in terms of jobs,” Fisher explained, referring to how AI can handle surge capacity without additional hiring.

For smaller organisations, the impact could be even more profound. “A small business might say, ‘actually, I don’t want to hire a marketing team. I’ll get agents to market for me,’ or ‘I don’t want to have a call centre’,” he continued, describing how AI was enabling businesses to function without entire departments. 

This shift toward what Salesforce executives call a “digital labour force enhancing your labour force” raises significant questions about the future of work in healthcare settings such as Mediclinic, where administrative and support functions may be prime targets for automation. 

Imported solutions strategy 


Mediclinic’s AI strategy extends beyond cost-cutting to include clinical applications. The company is exploring AI for improving the quality of care, such as earlier detection of deteriorating patients using wearable monitoring systems. It has also partnered with companies like Geneyx in the Middle East to deploy AI for analysing genetic data. 

The healthcare provider aims to balance its efficiency drive with enhanced patient experience through technology and the creation of new revenue streams from digital health solutions.

This bold bet on AI is table stakes from a global perspective, but one of the most significant digital transformation initiatives in South African healthcare history, with substantial implications for its workforce and patients alike.

The company had not responded to all the questions sent by Daily Maverick at the time of writing, and declined to specify exactly how many jobs would be affected by the cuts, saying only that the transition would be managed “responsibly and with care for affected staff members”. DM

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