U.S. Surgical Corp. said last week that its restructuring, expected to be completed by April 1, will eliminate a total of 1,600 jobs, or 20% of its work force, up from the 1,200 positions previously announced.
The company said nine top executives also will resign.
The Norwalk, Conn.-based company had estimated that it would cut as many as 1,200 positions worldwide (Dec. 13, 1993, p. 16; Oct. 18, 1993, p. 14). Although U.S. Surgical underestimated the scope of layoffs, a previously reported $130 million fourth-quarter charge will cover the costs, it said.
A U.S. Surgical spokeswoman said it slashed seven vice president positions, one senior vice president position and the position of its chief operating officer, Bruce Lustman, who will remain on its board of directors.
The restructuring will reduce the financially troubled firm's costs by about $150 million, a step analysts consider essential to its survival.
Like other suppliers, U.S. Surgical is suffering from declining demand from hospitals. It also has been hurt by its shift to distributors and its battle for surgical-supply business with Johnson & Johnson's Ethicon unit. Last month, it announced that it had hired investment bankers to seek equity investors (Feb. 21, p. 4).
U.S. Surgical expects to report a loss in the first quarter, but should see profits in the second quarter, the company said. U.S. Surgical hasn't reported complete fourth-quarter results, but it has said its operating loss equaled 26 cents per share.