Boston Scientific Cuts 455 as It Closes Two Facilities; Abbott Terminates 244
Published: Aug 18, 2015
August 14, 2015
By Alex Keown, BioSpace.com Breaking News Staff
SAN FRANCISCO – Two California-based pharmaceutical companies are set to slash their workforce, a California warn report shows. Boston Scientific and Abbott Laboratories will terminate about 700 employees from multiple facilities in California, Qmed reported this morning.
Boston Scientific, which manufactures medical devices, will terminate 455 employees from facilities in Fremont and San Jose as it prepares to move its manufacturing to Costa Rica. Manufacturing at those two sites will cease by the end of October. The manufacturing shift to Costa Rica is part of the company’s efforts to streamline operations, MassDevice reported. The Fremont and San Jose facilities manufacture devices for electrophysiology and imaging, including coils, stent systems, retrieval devices, IVUS catheters, ultrasound imaging devices, ablation catheters, according to the company’s website.
In 2013, Boston Scientific announced it eliminated between 1,100 and 1,500 jobs worldwide as the company looked to streamline operations costs of up to $200 million. The company said the restructuring move could be accomplished by simplifying manufacturing and consolidating production lines, the Boston Globe said.
Earlier this week, Boston Scientifics’ stock was downgraded by analysts. The stock is currently up this morning, trading at $17.38 per share.
Abbott will terminate 244 employees from its California sites, including 163 from the company’s Temecula site and 81 from its Santa Clara facility.
Last year Abbott laid off 100 employees from its Temecula site as part of the 2012 restructuring plan. The same plant lost 200 jobs in July 2012 and will bring the total number of employees there down to 1,700 from a high of 4,000 in 2012. The plant was acquired by Abbott when it snapped up heart device maker Guidant Corporation for $4.1 billion in cash in 2006.
In July Abbott struck a $250 million deal to acquire Tendyne Holdings, Inc., a private medical device company focused on developing minimally invasive mitral valve replacement therapies. At the same time, Abbott struck a $250 million deal to acquire Cephea Valve Technologies, a private company developing a catheter-based mitral valve replacement therapy. Financial terms of that deal were not disclosed.
Over a four year period from 2009 to 2013, more than 155,000 employees in the biopharma industry have been laid off as companies have scaled back research and development and eliminated manufacturing redundancies, BioPharmaDive reported. The terminations have increased as more and more M&A deals worth about $500 billion have been struck over the past two years. Mergers and acquisitions are often signals of coming pink slips due to overlapping efficiencies. As customer bases shift, that has also caused a need to reduce sales team members. Smaller investments in R&D have also caused a need for layoffs, BioPharmaDive said.