Medical Device Companies Cut (Jobs) and Run
Facing a struggling economy, many industries were forced to cut jobs in 2011. And the medical device industry, unfortunately, was no exception. With companies attributing layoffs to cost-cutting measures, the looming device tax, efforts to streamline operations, or outsourcing to China, it was a year of trepidation and uncertainty for many medical device professionals. Industry leader Medtronic led the way when it announced plans to eliminate up to 2000 jobs—approximately 4 to 5% of its global workforce—back in February in the wake of a 3% decline in sales that quarter. In April, the medtech giant shed 268 jobs in the Twin Cities, home of the company's global headquarters, as well as its cardiac rhythm disease management and neuromodulation businesses. Likewise, rival Boston Scientific announced plans to eliminate up to 1400 U.S. jobs by the end of 2013, a move it attributed to growing operations in China and streamlining operations in general. Also delivering bad news to its employees this year was Johnson & Johnson (J&J). Despite being a trailblazer in the drug-eluting stent market through its Cordis business, J&J bowed to competitive pressure from new, possibly better drug-eluting coronary stents entering the market that have forced prices down. With its market share plunging to 16% last year, J&J opted to refocus its Cordis business away from heart stents and on to diagnostics and noncoronary stents. As a result of this decision, the company announced that it would cut up to 1000 jobs and close two manufacturing plants. These mass layoffs at some of the sector’s most prominent companies, along with Stryker, C.R. Bard, Smith & Nephew, and lower-profile job cuts throughout the global industry, made it a tough year to be in an industry formerly regarded as relatively “recession proof.”