Boston Scientific (NYSE:BSX) said yesterday that the next stage in the turnaround engineered by chairman & CEO Mike Mahoney will involve an unspecified number of layoffs, although its overall headcount will likely remain “relatively unchanged.”
The reorganization aims to cut pre-tax expenses by $115 million to $150 million by the end of 2020, Marlborough, Mass.-based Boston Scientific said.
“We are taking these steps to build on our momentum and meet the challenges of affordable health care around the globe,” Mahoney said in prepared remarks. “We will continue to invest in strategic growth opportunities that enhance our reach, capabilities and efficiency to sustain our global competitiveness. These initiatives can help us deliver innovative solutions to more patients and enable profitable growth over the long term.”
Boston Scientific said it expects the program to cost $175 million to $225 million, pre-tax, and to be complete by the end of 2018.
“The program is focused on developing global commercialization, technology and manufacturing capabilities in key growth markets, continuing implementation of the company’s plant network optimization strategy and expanding operational efficiencies in support of the company’s operating income margin goals,” the company said.
And although layoffs are in store, the company said the restructuring will create new jobs in growth areas as its portfolio expands.
In April, Boston Scientific reported profits of $202.0 million, or 15¢ per share, on sales of $1.96 billion for the 3 months ended March 31, for an 11% top-line gain compared with Q1 2015, when losses were -$1.o million. Adjusted to exclude 1-time items, earnings per share were 28¢, 4¢ above the Street’s consensus expectation.
The company said it now expects to report full-year adjusted EPS of $1.06 to $1.10 per share, up from $1.03 to $1.07 previously, on sales of $8.075 to $8.225 billion (compared to $7.90 to $8.10 billion previously). Second-quarter adjusted EPS are pegged at 25¢ to 27¢ on sales of $2.01 to $2.06 billion, Boston Scientific said.
