Boston Scientific to cut up to 1,500 jobsAP , Associated Press
Oct. 24, 2013 10:25 AM ET
NATICK, Mass. (AP) — Boston Scientific Corp. plans to shed as many as 1,500 jobs worldwide, or 6 percent of its workforce, in an effort to cut costs.
The company also said Thursday that its CFO is leaving. Boston Scientific is promoting its corporate controller to replace him.
The Natick, Mass.-based medical device maker had already announced up to 1,000 job cuts in January in response to limited growth prospects in certain markets and taxes related to the health care overhaul. That's on top of a 2011 cost-cutting plan that included the elimination of 1,200 to 1,400 jobs. The company has about 24,000 employees.
In the newest plan, it said it will eliminate 1,100 to 1,500 jobs over the next two years through attrition and layoffs. It hopes to trim annual operating expenses by up to $200 million and invest some of the savings in initiatives that will bolster its growth.
The company's shares fell 38 cents, or 3.1 percent, to $11.91 in morning trading. The stock has been trading around five-year highs.
Boston Scientific has not posted a net annual profit since 2005, the year before it made a massive, $27 billion dollar acquisition of implantable defibrillator maker Guidant. The purchase has weighed on the company's balance sheet ever since, even as demand for the heart-zapping implants has declined.
Boston Scientific has also spent years addressing legal allegations about Guidant's handling of problems with its devices. Last week the company agreed to pay $30 million to settle Justice Department allegations that that Guidant knowingly sold defective heart devices to hospitals that implanted them in Medicare patients from 2002 to 2005.
The company said sales of implantable defibrillators and pacemakers improved slightly compared to last year. Boston Scientific and its competitors have suffered through a broader, multiyear slump in use of the heart-shocking devices following a series of recalls that affected all of the major manufacturers. Defibrillators monitor the heart for dangerous irregular heartbeats and use electrical jolts to shock it back to a normal rhythm.
Boston Scientific on Thursday reported a third-quarter loss of $5 million, or break-even per share, compared with a loss of $664 million, or 48 cents per share, in last year's quarter. If one-time items are excluded the company said it earned 17 cents per share. Its revenue was unchanged at $1.74 billion.
Boston Scientific said sales of urology and women's health products, endoscopy products, and neuromodulation devices improved. That countered a decline in sales of heart stents and other products.
The company said CFO Jeffrey Capello will leave Dec. 31 because he wants to find a broader management position. Capello has been Boston Scientific's CFO since March 2010. Daniel Brennan, Boston Scientific's corporate controller and senior vice president, will become its new CFO.