Boston Scientific To Eliminate Up To 1,400 Jobs
BOSTON (CBS) – With sales and earnings on the upswing, Boston Scientific on Thursday announced a restructuring program that will eliminate 1,200 to 1,400 jobs worldwide in the coming two years – even as it plans a $150 million, five-year China expansion and a $1 billion stock buyback program.
Investors reacted positively, sending shares in the Natick-based medical device maker up by 6.7 percent in early-morning, pre-market trading.
Lisa van der Pool of the Boston Business Journal reports
In a news release that also announced its positive quarterly earnings report, the company sketched its plan to eliminate as many as 1,400 positions through attrition and “targeted head count reductions.”
Plans related to specific regions and business lines are yet to be developed, the release noted.
The cuts will represent up to 5.6 percent of Boston Scientific’s current head count, which stood at 25,000 as of Dec. 31, 2010.
Boston Scientific estimates the program will reduce annual pre-tax operating expenses by about $225 million to $275 million by the end of 2013.
Some of that savings will be redirected to growth-oriented initiatives, the company said.
CEO Ray Elliott, who in May announced his pending retirement , said in a statement that the China expansion, restructuring and share buyback programs are all “key steps on the path to achieving our goals.”
Earlier this month, the Boston Business Journal ranked Elliott one of the most overpaid CEO’s in Boston.
As the Boston Business Journal reported, Boston Scientific reported net sales for the second quarter of $1.98 billion, compared to $1.93 billion a year ago, an increase of 2 percent, and revised its adjusted earnings outlook upward from previous guidance of $0.58 to $0.68 per share to an estimated range of $0.64 to $0.70 per share.
The company has also announced it will invest $150 million in China over five years , building a factory on the ground there, in an effort to take a share of that country’s health care market.