St. Jude slashing 500 more jobs
St. Jude Medical ($STJ) isn't done thinning its ranks. After cutting 300 jobs in August, the Minnesota devicemaker is preparing to slash another 500 this quarter, part of its ongoing restructuring plan.
St. Jude disclosed its plans in a regulatory filing, saying the total 2012 job cuts will account for 5% of its global workforce. The added 500 layoffs will cost between $40 million and $60 million, the company said, and the net effort will add $150 million to $200 million in charges through fiscal 2013.
Both rounds of job cuts are part of St. Jude's wide-reaching restructuring effort, consolidating all of the company's devices into two units: An implantable electronic systems group and a cardiovascular and ablation technologies division. St. Jude is also combining many of its ancillary departments, such as legal and IT.
CEO Dan Starks said at the time that the plan would help get St. Jude back on track after consecutive quarters of sluggish device sales. "We are focused on reducing costs, leveraging economies of scale, maintaining the highest level of quality and funding our entire portfolio of new growth drivers," Starks said in a statement.
Since the August announcement, St. Jude's plight has hardly improved. In the last quarter, the company's net sales dropped another 4%, driven by continuing declines for its cardiac devices. Then came an earful from the FDA over its manufacturing practices at a California plant that produces ICD leads, and, last week, disappointing study data revealing that St. Jude's Amplatzer heart plug seems to have little effect in preventing strokes.
When it first announced the restructuring plan, St. Jude said the initial 300 layoffs would save around $50 million or $60 million per year. The company did not specify how much the new round of cuts will reduce costs.
- here's St. Jude's 8-K
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