Medical device giant Medtronic, which has one of its largest manufacturing facilities in North Haven, has announced plans for a restructuring that aims to cut costs by between $450 million and $475 million a year.
The Dublin-based company, in a U.S. Securities and Exchange filing this week, disclosed its intention to reorganize its business around specific therapy areas.
The company currently operates in four groups: cardiac and vascular, minimally invasive technologies, restorative therapies, and diabetes, according to the company’s website.
The new operating model would create operating units (OUs) formed from the company’s existing businesses, the filing said.
“The OUs are designed to move the company even closer to its customers and to increase the agility, speed and efficiency of the organization,” the company said in the filing.
The filing did not give details about layoffs, but did say the company plans to consolidate operations throughout the business, including its global manufacturing, supply chain and facilities.
Medtronic spokesman Ben Petok confirmed in an email Friday morning that the restructuring includes “the difficult, but necessary, decision to reduce the size and infrastructure of our company.”
He said the company is providing employee assistance and would redeploy affected employees to other parts of the company wherever possible.
Asked specifically about the impact on the North Haven facility and its employees, he said, “We regularly create new roles in some areas of the business and reduce in others based on where we see market opportunities, but we don’t break down those details.”
Under the new model, OU leaders will have decision-making authority and full responsibility for their individual businesses and markets, the company said.
The company also plans to establish “technology development centers” in areas where it has “deep core technology competencies that are leveraged by multiple OUs.”
Potek said the change “will allow us to provide our customers with better service, more efficiencies, and continued meaningful innovations.”
Medtronic plans to transition the new model at the start of its fiscal third quarter in October and have it fully implemented by the end of January 2021.
The company expects to incur around $400 million to $450 million in costs through the end of fiscal year 2022 as a result of the restructuring, but said it will result in savings of roughly $450 million to $475 million a year beginning in fiscal 2023.
Medtronic said it will release further details on the plan at its virtual Investor Day on Oct. 14.
Contact Natalie Missakian at news@newhavenbiz.com
