Medtronic Inc. (NYSE:MDT) has taken the axe to its diabetes unit, according to news reports.
The Fridley, Minn.-based company has cut “hundreds” of employees in its diabetes unit, according to the “Diabetic Insider” blog run by David Kliff, a prominent diabetes industry analyst.
“Diabetic Investor has learned that Medtronic has decimated their division, axing hundreds of employees,” Kliff wrote, citing sources close to the situation. He first reported the job cuts last week on his blog, noting that the Medtronic brought in a “seasoned industry executive” to reinvigorate the units sales and marketing.
“Looking ahead, it will be interesting to see whether the company is serious about change, or will they once again become bogged down in the Medtronic corporate meat grinder,” Kliff wrote. “The folks at Medtronic corporate in Minneapolis view the diabetes unit as a cash cow and see little reason to invest precious dollars upgrading the Paradigm line or getting things right with the patch pump. They are also well aware that while the insulin pump market isn’t that great, to date no one has been able to figure out an effective strategy that would eat into their huge and very profitable installed user base. They may not be winning the majority of patients new to pump therapy, but this really hasn’t hurt their bottom line.”
A Medtronic spokesman contacted by MassDevice confirmed that there had been job cuts but wouldn’t put a figure on it. The company previously announced a plan to eliminate about 1,700 positions worldwide, in an attempt to consolidate several business units.
Medtronic also said that it extended its partnership with Bayer Healthcare (ETR:BAYN) to develop a next-generation wireless blood glucose meter. The two healthcare giants have collaborated on Medtronic’s MiniMed Paradigm insulin pumps since 2007.
MDT recently reported that diabetes sales were up 8 percent to $979 million during the first nine months of its fiscal year, which ended Jan. 28.