Boston Scientific (NYSE:BSX) announced today that it is taking actions in response to the COVID-19 pandemic, including pay cuts.
In anticipation of an even larger impact from the coronavirus outbreak in the second quarter, the Marlborough, Mass.-based company said in a news release that it is taking proactive steps to reduce costs so it can be in a strong position when healthcare systems begin to recover and elective procedures return to normal volumes.
The company said it is significantly reducing the salaries of its CEO, board of directors and executive committee members and, where appropriate, temporarily reducing workweek schedules for employees. According to a company statement, the temporary cuts include a four-day workweek for much of the company’s U.S. workforce over the next 90 days, which represents a 5% salary decrease for the year.
Other measures include decreasing discretionary spending and implementing precautionary measures to ensure business continuity in supply chain and manufacturing. Precautions include rotational shifts, segregating buildings and limiting movements across sites.
“We are focused on the safety and well-being of our people, who continue to find innovative solutions to support critical procedures and time-sensitive patient needs,” chairman & CEO Mike Mahoney said in the release. “As healthcare systems respond to the increasing demands of managing COVID-19, emergent procedures need to be prioritized to help enable increased hospital capacity, and therefore elective procedures are being delayed. While we expect this to negatively impact short-term performance, we continue to believe in the excellent, long-term fundamentals of our company and will continue to manage through these challenges with strategic focus and the winning spirit of our talented global team.”
Boston Scientific now expects first-quarter 2020 organic revenue to decline approximately 2-3%, but is currently conducting financial closing procedures and can’t offer more precise estimates at this time. Earlier this week, the company withdrew its full-year 2020 guidance and said additional details will be provided during its April 29 earnings call.