Boston Scientific to shed 500 jobs in cardiac product reorganisation
11 January 2006
Natick, Mass., USA. Boston Scientific Corporation (NYSE: BSX) has
announced measures to restore confidence in its cardiac rhythm management
(CRM) products and regain market share.
The company says the plan will result in a reduction of the CRM workforce
by approximately 500 to 600 employees in the first quarter of 2007.
Positions will be eliminated in research and development as well as a number
of other functions. The plan is expected to result in after-tax costs of
approximately $70 million, which include change-in-control payments related
to last year's acquisition of Guidant by Boston Scientific.
"This plan will shift resources from less productive projects to more
productive ones, reinvigorating our product pipeline and driving top-line
growth," said Jim Tobin, President and Chief Executive Officer of Boston
"It is designed to increase the productivity of our research and
development so we can deliver more and better products. This is a different
approach that will require us to be more selective, more disciplined and
more focused. This plan — coupled with strengthened sales and marketing
execution — will better align our resources to take advantage of the
substantial opportunities in the CRM space. Above all, it will allow us to
better serve physicians and patients with an improved flow of new products."
The Company today also released preliminary CRM net sales for the fourth
quarter of 2006 of approximately $489 million, a 10% increase over net sales
of $446 million in the third quarter of 2006.
"We were pleased with our sequential quarterly sales increase, and we
believe the CRM market is starting to resume its growth," said Tobin.
"Fourth quarter sales of implantable cardioverter defibrillators (ICDs) were
approximately $356 million — a 13 percent increase over the third quarter —
which indicates a strengthening of our number two position in the ICD
The majority of the job losses will occur at the Boston Scientific CRM
facility in Arden Hills, Minnesota, USA. Boston Scientific currently employs
approximately 29,000 people worldwide.