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This is a part of the Erlanger campus as shown near downtown Chattanooga on Wednesday.

Erlanger Health System has notified employees that administrators will begin laying off managers and directors this week in a second phase of a labor management plan to cut costs.

In an inter-office memo to employees sent Wednesday, Erlanger officials said they would provide additional information to employees 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, due primarily to lower surgery numbers, officials have said.

In January, the hospital announced it had cut six executive positions, from 15 positions to nine. Three executives, including the former CEO, were given nearly $1 million in severance packages.

This week, voluntary and involuntary layoffs of managers and directors began. Staff layoffs will be the third phase of the plan, the memo stated.

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

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