Shares of Haemonetics are up nearly 10 percent this morning after the company announced it was cutting about 11 percent of its workforce in a restructuring effort.
Shares of Haemonetics Corporation are up nearly 10 percent this morning after the company announced it was cutting about 11 percent of its workforce in a restructuring effort.
This morning, Haemonetics announced its Complexity Reduction Initiative, which it said is expected to save the company about $80 million by 2020. The announcement was made as part of its financial report for the most recent quarter that ended Sept. 30. The Complexity Reduction Initiative is a comprehensive program “looking at all aspects of the cost base and an important next step in the company’s multi-year, multi-phase turnaround.”
Savings from the initiative will be used to invest in growth areas such as the launch of NexSys PCS, clinical trials for hospital-based products, manufacturing capacity for equipment and disposables, the company said. Funding will also be used to add additional sales and clinical representatives, and employee development.
Those changes though will come with a cost. Haemonetics will terminate 350 positions by the end of March 2018, which is the end of the company’s fiscal year. In its announcement, the company said the cuts will come through voluntary and involuntary separations. Haemonetics said the cuts will exclude “certain identified critical roles in direct selling and clinical support, hourly plant workers and employees involved in critical, time bound projects.” Haemonetics said it remains committed to ensuring effective ongoing business operations and strong customer service throughout the transition period. While the announcement in its quarterly report were somewhat vague, a company spokesperson provided additional information to MassDevice.com. Some of the positions slated to be cut are currently open jobs. Other non-headcount reductions are related to reductions in direct material and indirect spending, facilities and freight, a company spokesperson told BioSpace.
“These are purposeful actions to streamline the way we work and enable us to better serve our customers, pursue our growth priorities and create an engaging and results-driven culture,” Haemonetics Chief Executive Officer Christopher Simon said in a statement.
Haemonetics has undertaken other restructuring plans before. MassDevice noted that it announced a plan in 2010 that included a cut of 170 employees and the closure of facilities in Phoenix and Chicago. Those were made as the company folded GlobalMed Technologies into its organization after an acquisition. In 2014, Haemonetics initiated another restructuring following the acquisition of Pall. Last year, the company initiated another round of layoffs as part of a restructuring – the same restructuring that brought Simon on board as CEO. When Haemonetics announced the 2016 restructuring, it said it planned for a pre-tax charge of $26 million, including $17 million worth of “termination benefits.”
