Medtronic
(NYSE:MDT)
is letting go of 59 workers at a facility in Sunnyvale, California, according to a notice filed with the state.
The California Employment Development Department says it received the WARN notice on April 7.
In a statement shared with MassDevice, Medtronic said it seeks effectiveness and efficiencies to drive growth. “As we assess our business, we need to make longer-term structural changes to ensure the sustainability of our organization. We previously announced plans to close this facility, and after careful analysis and consideration, we have made the necessary decision to close the site in June 2023, therefore eliminating some positions.”
The site is related to Epix Therapeutics, a radiofrequency cardiac ablation tech developer that Medtronic bought for $316 million in 2019. The FDA in 2021 approved the DiamondTemp ablation system, an atrial fibrillation treatment that Medtronic acquired through the deal.
The full WARN letter that MassDevice obtained from the EDD said the company plans to restructure and relocate operations at the facility, with all positions there eliminated. The job reductions start this month and run through September.
In October 2020, Medtronic internally communicated that it planned to transfer DiamondTemp catheter manufacturing to its Galway, Ireland catheter manufacturing facility (Parkmore site), according to the company. As a result, the Epix Sunnyvale site would close in 2023.
Medtronic says it is providing employee assistance and will work to retain and redeploy affected employees to other parts of the company wherever possible.
Medtronic is cutting costs
The move comes as Medtronic promises “significant expense reductions” in the final quarter of its fiscal year, which ends April 28, 2023. The world’s largest medical device company has said little about potential reductions to its workforce. The company reported more than 95,000 employees in its most recent annual report.
Other recent moves have included combining the company’s surgical robotics and surgical innovations units, though surgical robotics operations in Colorado and Connecticut will stay open. It also made an early retirement offer across much of the company between Feb. 13 and March 6.
Medtronic is just one of many companies in medtech and across the U.S. economy that seek to reduce costs. Inflation, higher interest rates, supply chain challenges and more have come together to make it more expensive to run a business. Medtech companies, in particular, have also had to grapple with their health provider customers working through operational challenges. Plus, China — a massive market for Medtronic and many other medical device companies — is centralizing buying for its healthcare system to reduce costs.
MassDevice has reported on more than 18,000 medtech workers let go across the industry since mid-2022.
