Boston Scientific Cutting Up to 1,000 More Jobs in 2013
Major Minnesota employer Boston Scientific Corporation said Tuesday that it plans to eliminate 900 to 1,000 positions worldwide this year in an ongoing restructuring process.
Natick, Massachusetts-based Boston Scientific currently employs about 5,000 in Minnesota at offices in Maple Grove, Plymouth, and Arden Hills, according to company spokeswoman Denise Kaigler. The company employs about 24,000 worldwide.
When asked how the latest round of cuts will affect Boston Scientific’s Minnesota work force and which types of jobs will be eliminated, Kaigler said in an e-mail that “those plans have not yet been finalized.”
“Plans detailing specific employee impacts will be developed for each affected region and business, and the company will work with employee representative bodies where required under local laws,” Boston Scientific said in a statement. It will make the reductions through a combination of employee attrition and “targeted headcount reductions.”
The med-tech giant described the latest round of cuts as an extension of a restructuring process that began in 2011. Including the cuts announced Tuesday, the company expects to eliminate between 2,100 and 2,400 positions between 2011 and 2013, according to a filing with the U.S. Securities and Exchange Commission.
Boston Scientific said it anticipates that the latest reductions will result in pre-tax charges of between $140 million and $160 million. But they will also reduce annual pre-tax operating expenses by between $100 million and $115 million after 2013.
Coupled with the restructuring moves that began in 2011, Boston Scientific said its latest cost-cutting efforts will reduce annual expenses by $340 million to $375 million. The company said a “substantial portion” of those savings will be reinvested “in targeted areas for future growth, including strategic growth initiatives and emerging markets.”
Boston Scientific announced its latest restructuring plans in conjunction with the release of its fourth-quarter and full-year 2012 financial results.
For the fourth quarter, which ended December 31, the company reported sales of $1.82 billion, down 1 percent from the same period a year ago. Earnings, meanwhile, totaled $60 million, or 4 cents per share—dropping 44 percent from $107 million, or 7 cents per share, during last year’s fourth quarter.
Excluding charges related to restructuring, acquisitions, litigation, and other activities, net income totaled $252 million, or 18 cents per share.
Boston Scientific’s fourth-quarter sales increased 14 percent in the neuromodulation sector, which includes implantable technologies for managing neuropathic pain and neurological diseases. Sales climbed 10 percent in its endoscopy business, and 9 percent in “peripheral interventions,” which includes products that treat vascular system blockages.
However, Boston Scientific’s “interventional cardiology” business—which includes technologies for diagnosing and treating coronary artery disease and other cardiovascular disorders—saw sales drop 9 percent, and revenue in its cardiac rhythm management business slid 4 percent.
Boston Scientific’s adjusted earnings beat the estimates of analysts polled by Thomson Reuters, who expected a profit of 11 cents per share on revenue of $1.76 billion for the fourth quarter. Shares of Boston Scientific’s stock were trading up about 4.5 percent at $7.17 Tuesday morning.
Boston Scientific President and CEO Mike Mahoney said in a statement that the company is “pleased but not satisfied” with improvements made during the quarter.
“We continued to enhance our growth portfolio, expand in the emerging markets, and implement operational changes to improve our execution and sharpen our customer focus,” he said. “I am confident we are taking the critical steps that are needed to return our company to long-term growth.”
For all of 2012, meanwhile, sales totaled $7.25 billion, down 5 percent from 2011. Boston Scientific reported a net loss of $4.07 billion, or $2.89 per share, compared to net income of $441 million, or 29 cents per share, in 2011. Excluding certain charges, 2012 earnings totaled $933 million, or 66 cents per share, compared to adjusted earnings of $1.02 billion, or 67 cents per share, during the prior year.
Looking ahead, Boston Scientific said it expects first-quarter sales to be in the range of $1.74 billion to $1.82 billion; earnings, meanwhile, are projected to be between 4 cents and 7 cents per share. For all of 2013, the company expects sales of $7.05 billion to $7.35 billion and earnings of between 29 cents and 37 cents per share.