UPDATED: Boston Scientific targets another 1,000 jobs in expanded restructuring
|Boston Scientific CEO Mike Mahoney|
Boston Scientific ($BSX) anticipates slashing between 900 and 1,000 additional jobs beyond massive layoffs and restructuring first launched in 2011, the company disclosed in its 2012 fourth-quarter earnings announcement.
Plans call for accomplishing this new round of job cuts through "employee attrition and targeted headcount reduction." The move, Boston Scientific said, will help the company reduce annual pre-tax operating costs by between $100 million to $115 million exiting 2013. Including the 2011 restructuring effort, that pre-tax savings jumps to between $340 million and $375 million. Back in July 2011, Boston Scientific disclosed plans to eliminate 1,400 jobs by the end of 2013 by the same means, but add as many as 1,000 new positions in China as it focused on that, and other emerging markets.
Job cuts aside, Boston Scientific's 2012 fourth quarter numbers suggest the struggling medical device giant is turning a corner from its financial woes.
It is true, traditional areas such as interventional cardiology and cardiac rhythm management continued to be hard hit. And one-time charges and expenses drove the company to a $4 billion net loss for all of 2012, versus $441 million in net income in 2011. But overall sales figures performed solidly, hitting $1.82 billion during the period, versus $1.85 billion in the 2011 fourth quarter--a drop that is only 1% year-over-year. Consider that overall sales plunged 7% in the third quarter and you can see how the trending line is starting to improve. Boston Scientific also boosted sales efforts in key product growth areas and in emerging markets including Brazil, Russia, India and China.
And these are all major goals in an ongoing turnaround strategy now fielded by new president and CEO Mike Mahoney. In a statement issued with the company's earnings, he noted the better numbers.
"We are pleased but not satisfied with our improved performance in the quarter," he said, after the company continued to focus on its "growth portfolio, expand in the emerging markets and implement operational changes to improve our execution and sharpen our customer focus."
Part of Boston Scientific's rebound strategy has been to focus on new growth areas through investment and acquisitions and the numbers show real progress. Neuromodulation soared 14% higher, to $104 million from $91 million. Endoscopy sales jumped 8%, hitting $329 million from $304 million. And peripheral intervention sales grew 8% to $199 million, up from $184 million over the previous year. But the situation is far from ideal overall. Traditional areas for Boston scientific continue to struggle, with double-digit sales declines for interventional cardiology during the quarter (10%), and a 5% global sales hit to the company's cardiac rhythm management division.
For the full year Boston Scientific's 2012 sales reached $7.2 billion, down 5% from $7.6 billion in sales booked for 2011.
- read the release