Boston Scientific to Cut 1,100 to 1,500 Jobs

Boston Scientific Corp. is planning to cut 1,100 to 1,500 jobs through 2015 as part of a global restructuring of its operations, the company said in regulatory filings.

Despite the pending staff reductions, the company’s moves will not significantly reduce its total workforce of 24,000, a spokesman claims. Boston Scientific, the second-largest manufacturer of cardiac devices, is basically moving jobs around, the Minneapolis, Minn.-based Star Tribune reports.

“During restructuring, our overall employee numbers will remain at similar levels,” Peter Lucht, the company’s director of external communications, told the newspaper. “But markets are shifting. The way we react to them has to shift. In some cases, assets are redeployed.”

For example, Lucht said, some manufacturing positions based in California will be transferred to Maple Grove, Minn., as well as Costa Rica. Some jobs are moving to Maple Grove “to leverage expertise already in place there,” the Star Tribune noted.

Lucht would not say whether the United States lose or gain jobs overall as positions are transferred between facilities. “I am not able to get into detail regarding specific impact at specific locations,” Lucht told the newspaper.

The latest job cuts are the second this year for the Natick, Mass.-based device behemoth. In January, the company announced it was cutting 900 to 1,000 jobs from its global workforce to offset the effects of the 2.3 percent medical device tax while investing in new products and geographical markets. Those cuts brought the total number of reductions in an earlier restructuring program to 2,400 jobs, or about 10 percent of the Boston Scientific’s global workforce.

The reductions add to a wave of cuts by some of the industry’s largest medtech companies. In May, Medtronic Inc. announced it was eliminating 2,000 jobs worldwide, including 500 in Minnesota. Medtronic officials said at the time they were “growing in some areas and making changes in others.” A year earlier, Medtronic cut 1,000 jobs.

In late 2012, St. Jude Medical Inc. announced it was shedding 800 jobs.

“Every time we see one of these big reductions, we think that’s got to be it,” Thomas Gunderson, a senior analyst with Piper Jaffray & Co., remarked to the Star Tribune. “Yet, it has been going on for five or six years.”

Gunderson said the job cuts are a way for companies to trim their “overgrowth” from the past decade, as U.S. markets remain relatively flat, while shifting jobs to meet faster growth in Asia.

“There is a race to establish position in China by the big players,” he told Star Tribune reporter James Walsh. “And we are going to continue to see it. They are going to go where the growth is.”

Third-Quarter Loss

Boston Scientific’s third-quarter loss shrank to $5 million, or less than a penny a share, from $664 million, or 48 cents, a year earlier when it took at $809 million goodwill charge for its cardiac rhythm management unit.

Investors have embraced Boston Scientific since Mike Mahoney took charge of the company’s turnaround effort as chief executive officer almost one year ago, more than doubling the share price during his tenure. Boston Scientific also has been on a buying spree, acquiring new technology for clearing blocked arteries, guiding doctors during heart procedures and treating hypertension.

“The program is intended to build on the progress the company has made to address financial pressures in a changing global marketplace, further strengthen its operational effectiveness and efficiency and support new growth investments,” the company said  in a filing with the U.S. Securities and Exchange Commission detailing the job cuts.

The company will take pretax charges of $175 million to $225 million to implement the program, including a $30 million charge in the fourth quarter of 2013. The company had an estimated 24,000 employees at the end of 2012, according to data compiled by Bloomberg.