VOL. 124 | NO. 98 | Wednesday, May 20, 2009
Medtronic Reduces Global Work Force
By Tom Wilemon
Medtronic Inc. is reducing its global work force by 1,500 to 1,800 employees to streamline operations, although it remained unclear Tuesday morning how many jobs would be affected in the company’s Memphis-based Spinal and Biologics Business.
Medtronic, which is headquartered in Minneapolis, has 38,000 employees worldwide and 1,600 in the Bluff City.
The company did report that about 400 U.S. employees had accepted early retirement or voluntary separation agreements. The majority of the staff reductions are to be completed by June 30, the company said.
Medtronic announced the move Tuesday, the same day it released annual and quarterly earnings reports. Its corporate calendar ended April 24.
Although it had an 8 percent increase in yearly revenue, the company’s fourth quarter sales decreased 1 percent. Medtronic’s total revenue for the 2009 corporate year was $14.599 billion, compared to $13.515 billion for 2008.
Meanwhile, the Memphis division saw annual revenue of $3.4 billion, a 14 percent increase driven by $609 million in Kyphon sales, the company said in its earnings release. Kyphon is the brand name for the company’s spine fracture management and repair products.
Although Medtronic is laying off workers, it also plans to add about 700 positions, primarily in sales and research and development, over its next fiscal year. It remained unclear at press time where those jobs will open.
“In 2009, we delivered on our financial commitments despite unforeseeable shifts in the economy,” Bill Hawkins, the company’s chairman and chief executive officer, said in a statement. “We strengthened our core businesses, made several strategic acquisitions in high-potential markets, and made solid progress advancing our pipelines by increasing our focus and discipline on driving innovation across the company.
“In addition, this was our second consecutive quarter of generating greater than $1 billion in free cash flow, which reflects our strong balance sheet management in addition to our focus on operational excellence.”