Boston Scientific to cut up to 600 jobs
Boston Scientific Corp. will eliminate 500 to 600 jobs from its cardiac rhythm division, with most of the cuts coming at a Minnesota office the Natick company acquired in its $27 billion acquisition of Guidant Corp. last spring.
Boston Scientific today also reported an uptick in sales of so-called cardiac rhythm devices such as defibrillators, which had recently slumped after safety recalls involving Guidant products.
The job cuts, affecting about 2 percent of Boston Scientific's 29,000-person workforce, will take effect in the first three months of this year.
A spokesman said the majority of the cuts involve positions at the Cardiac Rhythm Management unit in Minnesota.
The cuts were reported after the company's shares closed up 4 percent on the heels of announcements by Minnesota-based rivals Medtronic Inc. and St. Jude Medical Inc. Medtronic said it was planning to expand its presence in the defibrillator market, while St. Jude reported rising defibrillator sales and released preliminary fourth-quarter revenue results that beat Wall Street expectations.
Boston Scientific has sought to restore confidence in Guidant's defibrillator and pacemaker business after a string of recalls and safety warnings starting in 2005.
Boston Scientific said the staff cuts would eliminate some research and development projects to focus on initiatives with the greatest potential.
"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 CEO.
Employees affected by the cuts will be eligible for severance pay and help finding new jobs. The cuts will result in after-tax costs of about $70 million.
Meanwhile, Boston Scientific said sales of cardiac rhythm devices for the fourth quarter, ended Dec. 31, were about $489 million, a 10 percent increase. Defibrillator sales, which account for the bulk of cardiac rhythm sales, were up 13 percent.
(AP)
