Medical device companies are molting at a reptilian rate, shedding more than 2,000 jobs over the past 2 months as they look to slash costs across the board.
Several of the med-tech companies that are scrapping jobs say the 2.3% medical device excise tax in the Patient Protection and Affordable Care Act, slated to begin in January 2013. Others deny that the tax is the sole cause of their moves, saying it’s a factor but not determinative.
Seven medical device companies have announced restructuring plans involving layoffs since July 13:
- July 13: KCI cuts 300 jobs as it re-shapes after a $6.3 billion buyout by Apax Partners and a pair of Canadian pension funds. So far in 2012, KCI has cut 425 jobs.
- August 2: Hologic (NSDQ:HOLX) reveals plans to shed 130 jobs and close a Wisconsin manufacturing plant after its $3.7 billion acquisition of Gen-Probe.
- August 7: Boston Scientific (NYSE:BSX) cuts 50 workers from its Galway, Ireland operation.
- August 30: St. Jude Medical (NYSE:STJ) says it will lay off 300 employees in an effort to reduce annual pre-tax operating expenses by about $50 million-$60 million – coincidentally the same amount it estimates the medical device tax will cost.
- August 30: Word leaks that Boston Scientific is looking to cut an unspecified number of jobs.
- Sept. 6: Medtronic (NYSE:MDT) says it’s halfway through a 2012 restructuring plan involving 1,000 layoffs.
- Sept. 11: Welch Allyn announces plans to cut 275 jobs in response to the medical device tax.
- Sept. 13: Covidien (NYSE:COV) says it will move a manufacturing facility from South Carolina to Costa Rica, eliminating 600 jobs.