The 1,200 employees at Central Vermont hospital have been told that they will not be getting raises as they had expected this week.
The hospital is also laying off 10 management and administrative staff and cutting seven similar jobs which have been vacant.
Hospital officials are anticipating a $5 million operating loss for fiscal year 2007.
They blame the shortfall on an an unexpected increase in Medicaid patients and a decrease in surgical revenue following the resignations of three surgeons.