Layoffs in the pharmaceutical sector continue apace, with Merck announcing it will cut its US sales force by about 15% in order to curb the hurt from falling Vytorin sales and the FDA’s rejection of its Cordaptive cholesterol drug. Merck’s reps aren’t the only ones getting the axe, of course: Wyeth and Schering-Plough have both made big cuts this year, and Pfizer and AstraZeneca (among others) streamlined their workforces in 2007.
But this week, the layoff bug spread to the medical device industry as well, when Medtronic announced on Tuesday that it would reduce its global workforce by about 1,100 and consolidate some of its manufacturing and R&D operations. The company has nearly 40,000 employees worldwide, so the cuts are relatively tiny company-wide. But about one-third of the affected employees are at the company’s home-base operations in Minnesota, where its cardiac rhythm disease management (CRDM) business is headquartered.
Medtronic’s CRDM unit makes implantable cardiac defibrillators and pacemakers that shock the heart back into a normal rhythm. The market for such devices has been depressed lately, following a series of safety recalls affecting both Medtronic (the market leader) and its rival Boston Scientific. Smaller competitor St. Jude has also been gaining some market share in recent years.
The company hopes the cuts will shock costs back into alignment with revenues, and it also says it plans to add employees in some other areas of the business. One of those high-growth businesses is another shocker: Medtronic’s Neuromodulation unit, which makes implantable devices that send tiny electrical impulses into the nervous system to control pain and tremors.
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