Medtech titan Boston Scientific (NYSE:BSX) is making some big moves in the next few months, including some new rounds of layoffs and the halving of its cardiac devices business, Reuters reported.
The news was leaked by an anonymous Boston Scientific employee and later confirmed by a company spokesperson, who noted that the layoffs and the cardiac division split are not related.
Layoffs may be bad news for the Boston Scientific, which was the only company among the top 5 device makers to have reduced its workforce in the last year, but the cardiac split, which will separate the cardiac rhythm and stent businesses, could be a good move.
"I never understood why they put those 2 [business units] together in the first place," Morningstar analyst Debbie Wang told Reuters, adding that the decision may have been been related to company president Michael Mahoney’s transition to the corner office later this year.
"I think this reflects the change in management," Wang added. "By end of year, there will be a new CEO and I think he’s trying to configure things in a way that makes most sense."
The CRM and stents divisions were united by former CEO Raymond Elliott less than 3 years ago, hoping that a shared sales team might boost revenue.
Boston Scientific would not release details on the number of jobs it plans to eliminate, but did note that some cuts were related to changes in U.S. and international manufacturing.
The company earlier this month announced that it was cutting 50 positions at its Ireland facility, a move related to a 2011 restructuring plan.
The medical devices giant has had some hard times in recent years, including the ill-fated $28 billion acquisition of Guidant Corp. in 2006.
Just last month BSX shares their lowest level in 17 years after the company released a tough Q2 earnings report and lowered its 2012 forecast.
And the medical device company isn’t expecting a rebound anytime soon, interim CEO Hank Kucheman told Bloomberg today. Growth is expected to resume next year on strength in emerging markets and new product launches, he said.
"Our challenge is to stabilize those businesses here in the second half of 2012," Kucheman told the news service. "As we move into 2013 and beyond, our strategic investments will hit the top line of our enterprise in a meaningful way."
