Abbott to close Silicon Valley manufacturing facility at cost of 144 jobs
Abbott ($ABT) told FierceMedicalDevices that it will close its Redwood City, CA, manufacturing facility during the current quarter to improve the company's competitiveness and "better support its business in an ever-changing environment." The facility makes vascular devices.
California's WARN report, which lists company layoffs, shows that 144 employees were let go on Dec. 7. The information comes courtesy of the Worker Adjustment and Retraining Notification Act of 1988, which requires companies to notify states of certain layoffs.
According to the Abbott spokesman, the announcement was communicated to employees in early 2014.
There have been public warnings as well. Namely the discussion of restructuring plans in Abbott's quarterly filings, which repeatedly state that management "approved plans to streamline operations in order to reduce costs and improve efficiencies in various Abbott businesses."
"In 2013 and prior years, Abbott management approved plans to realign its vascular manufacturing operations and core diagnostics business in order to reduce costs," states another section of the latest filing.
In August, Abbott's vascular division laid off 161 employees in Temecula, CA and 81 employees in its headquarters in Santa Clara, CA.
The Temecula facility, located near San Diego, has been shedding jobs steadily, as has been documented by FierceMedicalDevices and FiercePharma, going all the way back to 2007, when 700 jobs were put on the chopping block. The plant, along with the company's operations in French Valley, once employed about 4,000 people. That number is now below 2,000. There were 100 cuts in November 2014. More than 600 cuts occurred in 2013. Additional employees were cut in 2012.
The Bay Area remains hotbed of medical innovation and med-startups, but California's role as center for mass manufacturing appears to be shrinking, as big companies increasingly move that function to countries like Ireland and Costa Rica, or other parts of the U.S.
In August, Boston Scientific ($BSX) closed manufacturing facilities in San Jose and Fremont, CA. It took its operations to Costa Rica at a cost of 455 U.S. jobs.
And in October, Medtronic ($MDT) said it will eliminate 21 positions from its Mira Loma, CA distribution facility effective as of today, according to the WARN report. The inland California facility opened in 2011 to process orders for its spine, cardiac rhythm management, cardiovascular and neuromodulation devices. It serves the western U.S. and supplies international distribution centers, Medtronic said upon the plant's opening.
Medtronic is building a $14.3 million facility in Galway, Ireland, to manufacture its fast-selling In.Pact Admiral drug-coated balloon for peripheral artery disease. The device will then be exported to global markets including the U.S. The company is transferring workers to the plant in order to achieve the promised synergies from its $50 billion purchase of Covidien, and promised that a "notable amount" of its growth will be fueled by products coming out of the country.
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