VOL. 126 | NO. 37 | Wednesday, February 23, 2011
On the Call: Medtronic CFO Discusses Layoffs
The Associated Press
Medtronic Inc., the world's largest medical device maker, announced Tuesday it will eliminate 4 to 5 percent of its work force to make up for anemic sales of its implants.
The cuts eliminate between 1,500 and 2,000 jobs and are the company's second major restructuring effort in the last two years. Though once seen as a recession-proof industry, device companies have watched sales of high-tech implants fall from a range of 10 to 15 percent down to 2 to 3 percent amid hospital belt-tightening and high unemployment.
On a call with company management, JP Morgan analyst Mike Weinstein asked Chief Financial Officer Gary Ellis for details about Medtronic's job cuts. Though he offered little specifics, Ellis suggested cuts would be implemented in more mature, slow-growing markets, such as the U.S. and Europe.
WEINSTEIN: Can you give us any insights into where you'll be making the cuts, in what businesses will the cuts come and within what segments?
ELLIS: We're not going to get specific about which businesses or geographies or which kind of a function we'll be addressing because it's going to be across the company. We're going to evaluate our employee complement across the organization and determine where we need to make some adjustments overall. You can obviously assume . as we look at this, there are some markets and some businesses that are growing very dramatically, whether it's emerging markets or some of the emerging therapies or obviously in some of the acquisitions. That's not where we're going to be primarily focused. It's going to be more on those businesses and geographies, developed markets, for example, where it's been a little slower and the markets have slowed down. That's all we're going to say at this point in time.
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