SurModics (NSDQ:SRDX) fired 6% of its workforce and consolidated several business departments in a move that the company hopes will save about $1 million. The device maker is also restructuring some of its operating units that it hopes will "strengthen the company and better position it for long-term growth."
The moves are expected to cost the company about 2¢ from its bottom line during the 4th quarter, but could help save money in the long-term.
The Eden Prairie, Minn.-based medical device maker said the layoffs, which affected a total of 7 employees, were a necessary measure, generating $1 million in savings that SurModics plans to use to beef up its 2 main product segments. Reorganization efforts, however, are expected to take about $500,000 from the company’s Q4 earnings.
"The decision to eliminate positions is always a difficult one," CEO Gary Maharaj said in prepared remarks. "We believe these changes are necessary to direct resources into those areas most likely to generate growth. We appreciate the efforts of our colleagues who are affected by today’s announcement, and we are grateful for their significant contributions to our company."
In addition to the layoffs, SurModics shook up its business structure, consolidating the R&D division with its quality, regulatory & clinical affairs department. Company vice president Andy LaFrence will also take on an additional role as head of operations and information systems.
SRDX shares have gained points since making the announcement Monday. Shares opened at $20.28 Monday morning and gained 2.9% to close at $20.65 by the end of the day. Shares have continued to climb through the week, trading at $20.86 as of about 1:25 p.m. today.