Medtronic to Slash Jobs Amid Slowdown in Key Market
Medical device maker Medtronic, feeling the pinch of a slowdown in one of its key markets, will eliminate about 900 jobs through early retirement packages, voluntary and involuntary separations, the company said in a filing.
Of those positions, 349 have been cut as of July 27, 2007.
The restructuring, to be completed by the end of its fiscal year in April 2008, is expected to generate annual savings of about $125 million.
Minneapolis-based Medtronic , which has about 37,000 employees, competes with St. Jude Medical and Boston Scientific in the market for heart pacemakers and implantable cardioverter defibrillators, known as ICDs.
The ICD market has slowed dramatically since 2005 following a wave of product recalls, mostly by Guidant, which was later acquired by Boston Scientific.
Separately, the company indicated that it intends to pursue the spinoff of Physio-Control, a wholly owned subsidiary that makes external defibrillators, emergency response systems and other support systems used by hospital emergency room personnel, after it resolves issues with the U.S. Food and Drug Administration.
Earlier this year, the company suspended shipments of certain products because of quality problems. It currently is working with the FDA on taking corrective actions and those should be completed by the end of the year.
Once the issues are resolved, Medtronic will proceed with the spinoff, the filing said.