Medtronic (NYSE:MDT) today began notifying employees of layoffs as the world’s largest medtech company grapples with higher costs of doing business.
In an email to employees this morning — recounted in Minnesota’s StarTribune newspaper — CEO Geoff Martha did not say how many employees Medtronic would cut from its global workforce of more than 95,000 people. He said layoffs would take place over the coming months, with impact varying by team, region and country.
“These decisions are never easy, and we’re taking great care to treat all impacted employees with dignity and respect,” Medtronic management said in a statement shared with MassDevice. “Medtronic will follow fair, consistent processes and provide comprehensive transitional resources to impacted employees during this time.”
The move comes as Medtronic promises “significant expense reductions” in the final quarter of its fiscal year, which ends April 28, 2023. Just last week, MassDevice reported on Medtronic’s plans to close a Sunnyvale, California facility, transferring the radio-frequency-ablation catheter manufacturing at the site to Ireland as Medtronic lays off 59 workers.
Other cost-saving moves at Medtronic
Other recent Medtronic cost-cutting actions include merging its surgical robotics and surgical innovations divisions. Surgical robotics facilities in Colorado and Connecticut will remain operational.
The company also extended an early retirement offer to a large portion of its workforce between Feb. 13 and March 6.
Medtronic is among the medtech firms and other U.S. businesses aiming to lower expenses. Factors such as inflation, increased interest rates, supply chain complications, and others contribute to the heightened costs of running a company. Medtech companies have faced operational difficulties experienced by their healthcare provider clients. Additionally, China, a significant market for Medtronic and other medical device companies, is centralizing healthcare system purchases to cut costs.
In addition, the company specifically placed bets on areas such as soft-tissue surgical robotics and hypertension-treating renal denervation that have been slower to produce high-growth results. The company’s diabetes business continues to work through an FDA warning letter, though Martha has previously said that the company has responded to most of the agency’s concerns.
MassDevice has documented over 18,000 medtech employees being laid off throughout the industry since mid-2022.
An opportunity for other medtech companies?
Medtech insiders commenting on LinkedIn acknowledged that these are tough times for Medtronic and its employees. But they also noted that the layoffs presented an opportunity for younger medical device companies looking for talent.
Torrey Smith, CEO of swimmable, stomach robot startup Endiatx, mentioned the company needed a senior full-stack software engineer, for example. “A down economy is an excellent opportunity for startups with fresh ideas to come to the forefront,” he said.
Said medtech marketer Scott Nelson: “For all those in growth mode — a bunch of LinkedIn ‘former MDT’ folks to be targeted.”
Tyler Mason — a spokesperson at Medical Alley in Medtronic’s home state — said that the group has in-transition memberships to employees looking for their next opportunity and a recently launched job board that allows applicants to submit their resumes that employers can then view. The group also has connections with many companies that are hiring amid all of the layoffs.
There were also words of encouragement. N.William Fehrenbach, a recently retired senior leader with 19 years at Medtronic, said: “Whether our paths crossed or not, know you are not alone. There are networks of folks ready to help you.”