After seeing flagging sales across its segments during the past three quarters, Medtronic has begun moving forward with layoffs that will span its international businesses.
With about 100,000 employees worldwide, the process of notifying people whether they still have a job could take months, the company said in a statement to Fierce Medtech.
“These decisions are never easy, and we’re taking great care to treat all impacted employees with dignity and respect,” the company said. “Medtronic will follow fair, consistent processes and provide comprehensive transitional resources to impacted employees during this time.”
The final impacts and overall timelines will vary “by team, region and country,” per an email sent to staff by CEO Geoff Martha as reported Tuesday by the Minneapolis Star Tribune. Medtronic has not confirmed the total number of employees that will be let go.
The cuts follow promises Medtronic made in February to pursue “aggressive cost reductions” in the face of larger economic headwinds and inflation as well as the impact of fluctuating foreign currencies, both of which contributed to reported year-over-year declines in revenues for the company’s diabetes and surgical divisions. Last year also saw dips in cardiovascular and neuroscience sales.
During its most recent earnings call for the third quarter of its 2023 fiscal year, Medtronic Chief Financial Officer Karen Parkhill said significant cost reductions that had begun in the months before would continue into the company’s fourth quarter, which wraps up at the end of April.
The company has also looked to limit travel and slow hiring, and has offered employees voluntary early retirement as a way to cut costs, according to Martha’s email. At the same time, Medtronic has looked to unload some of its business units entirely.
Through a joint venture with the dialysis giant DaVita Kidney Care, Medtronic spun out its renal services division earlier this month under the new banner Mozarc Medical. Both companies provided initial investments of $200 million for its launch and are splitting ownership of the newly created company. The move was largely a “lift and shift” of Medtronic’s previous kidney care business, including about 1,700 employees worldwide.
Meanwhile, Medtronic has been courting buyers of its patient monitoring and respiratory care outfits—including its catalog of hospital ventilators that saw widespread demand during the first phases of the COVID-19 pandemic. Potential suitors have included ICU Medical, GE HealthCare and Siemens, according to reports.
The company also quietly combined its surgical robotics and devices units in an internal reorganization that took place earlier this year. The newly christened $6 billion surgical operating unit sits within Medtronic’s larger medical surgical portfolio.
More recently, Medtronic disclosed plans to close down a Silicon Valley-area facility obtained through its 2019 acquisition of the heart ablation devicemaker Epix Therapeutics, resulting in layoffs of 59 employees. The company said it had made its plans known to move the manufacturing of Epix’s DiamondTemp catheter from Sunnyvale, California, to Ireland as early as October 2020.