Medtronic Cutting 2,000 Jobs, 500 in MN
Fridley-based Medtronic, Inc., is cutting 2,000 jobs, including 500 in Minnesota, due primarily to what the company described as “manufacturing consolidation efforts.”
The largest medical device manufacturer in Minnesota on Tuesday announced the job reduction plan during its fourth-quarter earnings conference call.
According to company spokeswoman Cindy Resman, about 65 percent of the reductions have already taken place, with the remainder scheduled to happen throughout the company’s 2014 fiscal year, which ends April 26.
The plan included eliminating 500 jobs in Minnesota, however, Medtronic also recently added 160 jobs in the state and there are 130 available Minnesota jobs currently posted online, Resman told Twin Cities Business. Resman said almost all affected employees in Minnesota have been notified.
The job restructuring is expected to result in about $200 million to $225 million in annual savings, Chief Financial Officer Gary Ellis said during Tuesday’s conference call.
Although Medtronic operates in more than 120 countries, about half of the cuts came from its U.S. work force, Ellis said.
The cuts took place predominantly in the company’s spine segment and cardiac and vascular group (CVG) in an attempt to reduce product costs.
CVG is responsible for more than half of Medtronic’s annual revenue and encompasses the cardiac rhythm disease management (CRDM), coronary, endovascular therapis, and structural heart businesses. The largest CVG section is CRDM, which is headquartered in Mounds View, along with Medtronic’s structural heart business. The CRDM’s key products include catheters, pacemakers, and defibrillators.
Earlier this month, Medtronic cut 230 jobs from its Memphis-based spinal business. Medtronic’s spine business is one of four divisions that together comprise the company’s restorative therapies group; the other three businesses pertain to neuromodulation, diabetes, and surgical technologies.
The company currently has about 45,000 employees worldwide, including 8,000 in Minnesota.
In addition to announcing its planned job reduction, Medtronic on Tuesday also said that net earnings for its fourth quarter, which ended April 26, totaled $969 million, down 2 percent from $991 million during the same period in 2012.
However, after eliminating one-time costs, which included a $147 million job-restructuring charge, the company’s adjusted earnings totaled $1.12 million, or $1.10 per share, up 8 percent from $1.04 million, or $0.99 per share, during the same period in 2012. Earnings per share were $0.07 higher than what analysts polled by Thomson Reuters had expected.
Revenue, meanwhile, totaled $4.46 billion, up 4 percent from $4.3 million in the fourth quarter of 2012. Fourth-quarter revenue was above analysts’ projections of $4.38 billion.
Earnings for the company’s full fiscal year totaled $3.47 billion, down 4 percent from $3.62 billion in 2012. Revenue for its full fiscal year totaled $16.6 billion, up about 2.5 percent from $16.2 billion during the prior fiscal year.
Shares of Medtronic’s stock were trading up about 5.25 percent at $52.51 during early Tuesday afternoon trading.