A Medical Device Daily
Boston Scientific (Natick, Massachusetts) said it is preparing another round of job cuts and planning to break up its biggest business, cardiac devices, reversing some of the restructuring put in place by its former chief executive, according to a Reuters report.
A Boston Scientific spokesman confirmed the moves outlined in a letter to employees this month, but said the two actions were unrelated. Some job cuts would stem from manufacturing adjustments in the U.S. and abroad, he said.
The medical device maker is expected to announce the additional layoffs within the next two months, according to a person close to the company. The number of layoffs was not specified.
The source told Reuters that details of the changes were included in an internal memo from acting CEO Hank Kucheman earlier this month. The source, who was not authorized to discuss the matter with media, asked to remain anonymous.
In the meantime, Boston Scientific will separate its cardiac rhythm management unit, which makes heart pacemakers and implantable defibrillators, from its interventional cardiology business, which makes stents, the source said. The units were combined less than three years ago under Elliott, who expected the business to benefit from the expertise of a shared sales force.
In other restructuring news, St. Jude Medical (St. Paul, Minnesota) reported the realignment of its product divisions into two new operating units: the Implantable Electronic Systems Division (IESD) and the Cardiovascular and Ablation Technologies Division (CATD). The company will also centralize several support functions including information technology, human resources, legal, business development, and many marketing functions. The company's U.S. and International Divisions, which are focused on product commercialization, will continue serving customers based on existing call points and specialties.
Under the leadership of Eric Fain, the IESD will be comprised of the former Cardiac Rhythm Management Division and the former Neuromodulation Division. Under the leadership of Frank Callaghan, the CATD will be comprised of the former Atrial Fibrillation Division and the former Cardiovascular Division. Fain and Callaghan will report to Group President Michael Rousseau.
“The reorganization is part of a comprehensive plan to accelerate our growth,“ said Daniel Starks, chairman, president/CEO of St. Jude Medical. “We are focused on reducing costs, leveraging economies of scale, maintaining the highest level of quality, and funding our entire portfolio of new growth drivers.“
The company estimates that as a result of these organizational changes, it will be able to reduce pre-tax operating expenses by approximately $50-$60 million annually beginning in 2013. The company is providing support to the approximately 300 employees whose jobs have been eliminated as a result of today's announcement.