Solventum said today that it cut 800 employees in a previously reported restructuring after spinning out from 3M last year.
The layoffs and other restructuring expenses cost $120 million to execute but are estimated to save the company $120 million per year going forward.
In the first year, the savings from the restructuring “offsets the incremental cost for public company stand-alone and growth investments,” the company said in a presentation to investors.
Medical Design & Outsourcing: Solventum discloses executive pay for first time since spinning off from 3M
“Solventum spun from 3M with a pre-existing team structure,” a spokesperson told the StarTribune. “Since then, the number of employees in Minnesota has continued — and will continue — to grow. The previously announced restructuring will allow us to direct our strategic investments to fuel additional growth.”
The restructuring was part of the first phase of Solventum leadership’s plan to transform the business. That first phase — which they described as “Capture hearts and minds and stabilize the business” — included defining a new mission of “Enabling better, smarter, safer healthcare to improve lives.”
“Solventum has tremendous potential, with attractive businesses, large and growing markets, and highly regarded brands,” Solventum CEO Bryan Hanson said in a news release. “We have undertaken a significant transformation to unlock the potential of our Medical Surgical, Dental Solutions, and Health Information Systems businesses, positioning the company to drive accelerated growth and create shareholder value.”
To correct an organization characterized in the presentation as “centralized, slow, lacking decision rights and accountability,” the company launched a global Solventum Way restructuring to decentralize and align the company to support “the culture of increased autonomy, speed and accountability.”
That restructuring included corporate R&D, medical affairs and corporate marketing in an effort to enhance the innovation process. Solventum said it also realigned thousands of roles to drive growth and started evaluating new product introductions to determine whether to kill them or keep them in an effort to focus on more innovative, valuable products.
Already, Solventum says 85% of the leadership team is new to the company, including more than 60% of executives at the VP level and higher. The company has also designated jobs that are “critical-to-transformation” and said 40% of the people in those roles are new to the company.
Citing a “lack of strategic clarity, rotating leaders [and] lack of decision rights,” the company said it has also ended leadership rotations for better strategy continuity, developed a data-centric strategic plan focused on revenue and margin drivers, and pushed decision-making lower in the organization.
Solventum’s second phase is meant to “enhance strategic focus.” The company expects 80% of its revenue growth will be driven by negative pressure wound therapy, IV site management, sterilization assurance, core restoratives and revenue cycle management.
In February, Thermo Fisher Scientific said it would pay $4.1 billion to buy Solventum’s Purification and Filtration business. The cash from that deal will help Solventum pay down about half of its original debt.
That divestiture will also fuel accelerated M&A activity by Solventum, which expects tuck-in deals as early as this year.
Solventum is also building a new plant in Brazil and has a new distribution center in Europe.
In a post-presentation report, Ryan Zimmerman and Iseult McMahon of BTIG described Solventum’s long-range targets (including accelerating organic sales growth to 4–5% in fiscal year 2028) as encouraging: “Now go prove them to us.”
