Medical device manufacturer Stryker Corporation last week announced plans to cut its global workforce by approximately 5 percent. Other restructuring activities are also anticipated to reduce the company’s annual pre-tax operating costs by over $100 million beginning in 2013.
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The reductions and restructuring “are being initiated to provide efficiencies and realign resources in advance of the new Medical Device Excise Tax scheduled to begin in 2013, as well as to allow for continued investment in strategic areas and drive growth despite the ongoing challenging economic environment and market slowdown in elective procedures,” the company said in a press release.
"As our markets continue to evolve, these actions are part of our ongoing focus on quality, innovation and cost, and position the company to continue to provide strong, consistent growth in a changing environment," said Stephen P. MacMillan, Stryker's chairman, president and CEO, in a statement. "Against this backdrop, we are committed to achieving consistent double-digit per share earnings growth in 2011 and beyond."
The company plans to provide affected employees with severance packages, counseling and job placement services. Roughly 1,000 people are expected to lose their jobs.
Stryker expects to record pre-tax restructuring charges related to these reductions and restructuring activities totaling approximately $150 million to $175 million, of which approximately $85 million to $95 million are expected to be recorded in the fourth quarter of 2011.
This is not Stryker’s first workforce restructuring of the year. In May, Stryker said it was cutting 142 jobs at a facility in Cork, Ireland. The jobs were to be moved to China and Malaysia. The Irish Examiner reported Stryker citing competitiveness and cost as reasons for the move.