The cuts will represent a workforce reduction of 4-5%, but the company has yet to reveal details on which areas will be targeted, though there has been an indication that the focus will be on back-office and administrative roles.
“It could have an impact in terms of not needing as many employees in certain areas,” said CEO Bill Hawkins, who is to retire in late April.
The medtech company said that various industry-wide challenges, such as market-share pressure and pressure on product prices amid tougher bargaining from hospitals, are the reason for cutting costs.
In its recent reported earnings, Medtronic’s heart-rhythm medical devices business shrank slightly, while growth in spinal devices improved by 2.3%. The company hopes these will improve due to the FDA’s recent approval of a pacemaker that is safe in MRI scans and once current quality-systems issues are resolved with regard to its new defibrillator product.
Plans have also been revealed to sell the company’s Physio-Control external defibrillator business, following a four-year delay due to quality challenges.