Orthopedic giant Stryker is on track with the previously announced layoffs that the company blamed on the 2.3% medical device tax slated to take effect in January.
The layoffs, which Stryker announced around this time last year, are being conducted on a rolling basis and the company expects to free up more than $100 million in costs before next year.
Stryker spokeswoman Tamara Cutler confirmed with reporters that the layoffs were underway as planned.
"The estimated 5% workforce reduction was announced in Nov. 2011 and at that time, we had approximately 20,000 global employees, so the 5% was estimated to be about 1,000 employees," Cutler told mLive, dispelling rumors that surfaced over the weekend putting layoff figures closer to 1,200 employees.
"The reductions are still expected to be complete by the end of 2012," she added.
Stryker initially announced the layoffs in November 2011, saying at the time that the
reductions should free up capital for strategic investments and growth "despite the ongoing challenging economic environment and market slowdown in elective procedures."
The news made quite a stir as the medical device maker was among the 1st to vocally cite the impending medical device tax, which takes effect January 1, as a direct driver for layoffs.
Then-CEO Stephen MacMillan, who recently took up a post as CEO and part-owner of anti-infection products maker sBioMed after a controversial break-up with Stryker, has long been a vocal critic of the device tax. He told an industry lobby conference in September 2011, "There is no doubt that we’re already starting to think about actions that offset that additional tax."
"Here we are, one of the greatest industries in the country, and we’re staring down on January 1st, 2013 and the addition of a 2.3 percent excise tax, while meanwhile on the other side all the discussion in Washington is about creating jobs," he said. He estimated at the time that the tax would cost Stryker about $150 million in 2013.
SYK shares gained 1.2% in late morning trading today, going for $53.65 apiece as of about 11:30 a.m.