A Medical Device Daily
Siemens (Munich), Europe's largest engineering company, plans to cut as many as 1,600 jobs at its healthcare division and will scale back the business after falling behind competitors, according to a Bloomberg report.
The planned cuts amount to as much as 8% of workers at the diagnostics subsidiary, said Michael Sen, the CFO of the healthcare operations. Another 400 jobs will go as Siemens stops making linear accelerators that create radiation for cancer treatment.
Siemens is embarking on the unit's second major overhaul in less than two years, after Siemens spent more than 10 billion ($13 billion) since 2006 bolstering the diagnostics business. Order intake and sales at the healthcare unit failed to grow in the most recent quarter, and profitability at the diagnostics business has slumped to less than half the rate two years earlier.
Diagnostics, which accounted for 29% of Siemens health care's 12.46 billion euros in sales in fiscal 2011, posted an operating margin of 6.7% in the most recent quarter. That's down from 14.7% in 1Q10. The division, which sells equipment to test body fluids for diseases, employs almost 15,000 people globally.
In other restructuring news, CareFusion (San Diego) reported that it is keeping its manufacturing business in Palm Springs, California, saving nearly 300 jobs.
Executives of CareFusion met with employees to tell them the company is keeping its factory in Palm Springs and has dropped plans to move the operation to Minnesota.
“This is huge news for the city of Palm Springs and our local economy,“ said Mayor Steve Pougnet in a statement.
CareFusion makes technologically advanced ventilators and diagnostic devices for acute respiratory care, and several types are manufactured at the Palm Springs plant by some 270 workers.
In July, CareFusion reported it would shut down the Palm Springs facility by 2013 to transfer its production lines to a sister plant in Plymouth, Minnesota after the company determined it would be more efficient to combine the operations.