A Medical Device Daily

Medical device maker Boston Scientific (Natick, Massachusetts) is preparing to slash thousands of jobs to counter slumping sales, according to a media report Tuesday.

Wall Street analysts who follow the company predict it will cut between 2,000 to 3,400 jobs, or about 7% to 12% of its work force of 28,000. The company has already cut 500 to 600 jobs this year.

“We will be reducing our expenses and head count to bring them in line with our revenue,” Boston Scientific spokesman Paul Donovan told The Boston Globe. “These reductions will be part of our ongoing efforts to restore profitable growth, increase shareholder value, and strengthen Boston Scientific for the future.”

The company has struggled with weak sales since early 2005 on its two key product lines: defibrillators and drug-coated stents. The implantable defibrillators, which help regulate the heart, have been hurt by a series of recalls. Sales of drug coated stents, metal tubes that are used to prop open arteries, have shriveled amid questions about their safety and benefits.

The company held $8.25 billion in long-term debt as of June 30. Much of the debt is from Boston Scientific’s $27.2 billion acquisition last year of Guidant (Indianapolis), a company that has been mired in litigation.

Meanwhile, federal regulators in April lifted a quality-control warning about problems involving a Guidant plant that makes defibrillators and pacemakers — a step that enabled Boston Scientific to resume seeking approval for new devices to correct abnormal heartbeats. However, a separate FDA warning involving Boston Scientific’s tracking of safety issues is still pending and is limiting the company’s ability to introduce other types of products.

The company’s stock has fallen 40% since the Guidant acquisition was announced in early 2006.

Jan David Wald, a med-tech analyst with Stanford Group (Houston), said he thought the cuts would affect about 7% of Boston Scientific’s overall work force.