Dive Brief:
- Boston Scientific announced a global restructuring that will involve changes to its supply chain and organizational structure.
- The heart device company said in a Monday securities filing that it expects “some headcount reductions,” though it will still post new jobs in areas of growth. Boston Scientific did not say how many positions it expects to cut. The company did not respond to MedTech Dive’s request for comment by publishing time.
- In total, the company expects about $700 million to $800 million in pre-tax charges, according to the filing. The restructuring, approved by the company’s board, is expected to start this year and be complete by the end of 2029.
Dive Insight:
Boston Scientific said the plan is intended to drive cost efficiencies and ensure the company has the structure and resources to support its strategic priorities. J.P. Morgan analyst Robbie Marcus wrote in a research note that the restructuring was not a surprise given a slowdown in two of the company’s key franchises, electrophysiology and Watchman.
In April, Boston Scientific slashed its earnings and sales growth forecasts following setbacks in the two businesses, as the company faces rising competition in electrophysiology from competitors in pulsed field ablation. Boston Scientific will report its next quarterly earnings on Wednesday.
It plans to reduce gross pre-tax expenses by about $500 million through the program, and reinvest a portion of the savings into growth initiatives.
In total, the company expects about $300 million to $350 million in costs related to transferring manufacturing lines, $275 million to $300 million in termination benefits, and $125 million to $150 million in other costs, such as contract cancellations and consulting fees.
Boston Scientific last underwent a restructuring in 2023, including 120 jobs cut in Houston, Texas, as the company moved some work to a different facility after acquiring Preventice Solutions. The following year, Boston Scientific closed the headquarters of Silk Road Medical after acquiring the company, affecting 138 jobs.
Stifel analyst Rick Wise wrote in a research note that the restructuring may help Boston Scientific integrate recent acquisitions, with the company having made more than 10 in the last five years.
