Medtronic (NYSE:MDT) yesterday announced the enterprise excellence program, a multi-year business growth and efficiency program focused on global operations, functional and commercial optimization looking to save $3 billion by the end of its 2022 fiscal year.
The Fridley, Minn.-based company said that while it expects its overall employee base will remain relatively unchanged, there will be charges associated with employee related costs including termination benefits and severance packages over the next five years, according to the SEC filing.
Charges of approximately $1.6 billion to $1.8 billion are expected for the company by the end of its fiscal year 2022, according to the SEC filing, with an estimated 40% to 50% associated with employee related costs.
“There is not a definite number of impacted employees to identify at this time as several factors will influence our overall resourcing impact over the five year period. As we stated in our 8K filing, while the company anticipates there will be some employees impacted as a result of the restructuring and realignment plans, the company expects that its overall employee base will remain relatively unchanged, as new jobs are created in new capability areas and resources are deployed to support the company’s growing market needs. In addition, Medtronic currently has approximately 4,000 open positions which may also offset any potential net impact to overall Medtronic headcount,” a Medtronic spokesperson told MassDevice.com via email.
The newly launched program will focus on three categories, Medtronic said, including integrating and enhancing global manufacturing and supply processes and systems, improving productivity and employee experience through functional optimization and improving productivity and customer experience by optimizing certain commercial processes.
The company said that additional charges and payments could occur related to the restructuring, and that it will provide additional disclosures, according to the SEC filing.
Last month, Medtronic’s spinal devices division agreed to pay $12 million to settle allegations that the medtech giant made false claims to doctors and patients about its Infuse bone-growth protein, according to a Star Tribune report.