Boston Scientific Corp. is cutting costs after several years of disappointing financials.
The Marlborough, Mass.-based medical-device maker has announced a global restructuring program that is expected to reduce annual pre-tax operating costs by $115 million to $150 million. Boston Scientific did not disclose how exactly it would cut costs or how many workers could be laid off as a result of restructuring.
The company did say that it expects to incur roughly $175 million to $225 million in costs related to the restructuring process and that several actions will be taken immediately. All other restructuring activities will be completed by the end of 2018, subject to any employee-related conditions required under local laws.
Some employee attrition is expected as a result of the restructuring process, the company said. But it's anticipated that the company's overall employee base will remain relatively unchanged as resources are diverted to growing businesses and new jobs are created.
Boston Scientific has been trying to rebound after a difficult few years following its 2006 acquisition of Guidant, which, along with Boston Scientific, paid $30 million in 2013 to settle allegations that it knowingly sold defective heart devices. The company's results have improved, but it still suffered a $142 million loss in fiscal 2015, compared with a $299 million loss in 2014.
It's expected that a “substantial portion of the (restructuring) savings” will be invested in “strategic growth initiatives,” the company said.
"We are taking these steps to build on our momentum and meet the challenges of affordable health care around the globe," Mike Mahoney, CEO and chairman of Boston Scientific's board, said in a statement. "We will continue to invest in strategic growth opportunities that enhance our reach, capabilities and efficiency to sustain our global competitiveness. These initiatives can help us deliver innovative solutions to more patients and enable profitable growth over the long term."
