
St. Jude Medical (NYSE:STJ) today announced that it will terminate another 500 employees, representing 5% of its global workforce, as the company undergoes a massive overhaul.
The additional layoffs come as the medical device giant centralizes support functions around 2 new operating units that it’s forming in line with its "2012 Business Realignment Plan."
St. Jude announced in August that it would restructure its entire business from 4 divisions into 2 new operating units: the Implantable Electronic Systems Division and the Cardiovascular and Ablation Technologies Division.
The company said at the time that the realignment would result in around 300 layoffs, although it did not specify what units or divisions would be hit by the cuts. The 500 layoffs announced today are in addition to the ones announced in August, St. Jude spokeswoman Kate Stoltenberg confirmed with MassDevice.com today.
Analysts speculated that the massive layoffs may be partly attributable to the 2.3% medical device tax taking effect in January, and the company called the levy "1 of many factors" that drove the restructuring initiative.
St. Jude’s new announcement noted that the cuts come from consolidation of the support centers, including information technology, human resources, legal, business development and certain marketing functions.
As an industry, medical device makers announced more than 2,000 layoffs between between July 13 and September 13 this year alone, several of them citing the medical device tax as a factor in the decision to make cuts.