Changes are afoot within Siemens Healthineers’ diagnostics business—though it’s still unclear just how far those changes will go.
First, the company-verified news: According to a filing with the New Jersey Department of Labor this month, a total of 300 workers within the Siemens Healthcare Diagnostics division are slated to be laid off.
The layoffs comprise workers in New Jersey’s Morris County, and they span a wide time frame, with the cuts taking effect across 13 dates stretching from March of this year to the final day of 2024.
Those 300 cuts include the 67 layoffs that Siemens confirmed earlier this year in another Worker Adjustment and Retraining Notification (WARN) notice with the state: That workforce reduction affected Siemens Healthcare Diagnostics workers in Flanders, a city in Morris County, and took effect on Sept. 7, which is included in the new batch of layoff dates.
According to a statement from the company, the layoffs are part of the changes that Siemens Healthineers began implementing at the end of 2022 to battle the negative effects of “the COVID-19 pandemic, global inflationary concerns, supply issues and labor shortages.”
The September cuts in Flanders came after Siemens opted to transfer manufacturing of its Atellica Solution immunoassay modules from there to its Swords facility in Dublin, Ireland. The broader swath of cuts expand on that move: All production of the Atellica Solution platform is now on track to move to Dublin by September 2024, per the statement.
The affected roles are mainly in manufacturing, and a Siemens spokesperson said in the statement that the laid-off employees will be eligible for severance and outplacement benefits and will also have the chance to apply for other positions within both Siemens Healthineers and the larger Siemens group.
The cuts only affect those roles tied to production of the Atellica Solution platform, and not the remainder of the approximately 750 people who currently work at the Flanders site. Nor does the consolidation “impact other operations of the Diagnostics business area of Siemens Healthineers or of Siemens Healthineers / Siemens businesses in New Jersey,” according to the statement.
Less absolute, meanwhile, are reports that surfaced this week suggesting that Siemens Healthineers is in the process of exploring new options for the entire diagnostics division.
In a Thursday dispatch, Bloomberg cited multiple unnamed sources “with knowledge of the matter” who claimed that Siemens has tapped advisers to help assess those options, which could potentially include a sale or carve-out of the diagnostics business that could be valued as high as $8 billion.
Reuters doubled down on the report with news from its own anonymous source “familiar with the situation,” who noted that the strategic review is in its early stages.
The possible sale or other form of separation would free Siemens from a division that stands largely apart from the rest of the company’s portfolio, according to the sources, potentially streamlining the business. The diagnostics division has been stuck in a downward spiral this year—registering year-over-year decreases of 24%, 39% and 20% in the first three quarters of 2023, respectively—thanks to plummeting sales of its rapid COVID tests.
In a statement to Fierce Medtech, a Siemens Healthineers spokesperson said, “The focus in our Diagnostics business has been and remains currently only on transformation. Beyond that, I’m afraid we can’t comment on market rumors.”
That lack of official confirmation didn’t stop investors from reacting positively: By Friday morning, the company’s stock price had risen to its highest level since early August, having climbed about 5% over its closing price Wednesday afternoon.