Medtronic (NYSE:MDT) has reportedly increased its workforce at its spine business in Memphis by only 14.3%, despite pledging 11 years ago to a 49% increase to win $20 million in local tax breaks, but far exceeded investment and wage commitments.
Back in 2006, Fridley, Minn.-based Medtronic promised to boost its local employment from 1,225 workers to 1,825, but recent cuts to the Bluff City workforce put that number at roughly 1,400, the Memphis Commercial Appeal reported.
But Medtronic is paying its workers much more than it promised when the tax deal was struck, according to the newspaper. Back then the pledge was for an average annual wage of $55,700; today the average pay is $88,000. And the world’s largest pure-play medical device maker spent 142% more on capital improvements than initially planned, dropping more than $218 million rather than the $90 million it promised to spend.
The 15-year tax incentive plan for Medtronic is up for review by the Economic Development Growth Engine of Memphis & Shelby County, the newspaper reported.
“Medtronic operates in a highly competitive environment, and transformation is an inherent part of our business. We continually adjust as necessary to deliver operational and functional excellence, drive growth, and strengthen our position for the future in a highly dynamic healthcare industry,” spokesman Victor Rocha told the paper. “In the past few weeks, a number of employees at Medtronic’s Memphis campus were impacted by a reduction in force.
“We recognize the strong work, dedication and quality of the employees. We are providing employee assistance to help reduce the effects of this action. The company is supporting employees as they transition to new employment opportunities,” Rocha said.