Boston Scientific to restructure in order to cut cost by $150 mn
09 June 2016
US medical device maker Boston Scientific Corp yesterday said that it plans to restructure in order to cut cost by $150 million by 2020.
The company said that it expects some job cuts and targeted headcount reductions to result from the restructuring, but its overall employee base will remain relatively unchanged since new jobs are created in areas of growth.
Boston Scientific estimates that the restructuring will reduce gross annual pre-tax operating expenses by approximately $115 million to $150 million by the end of 2020 and plans to reinvest a substantial portion of the savings in strategic growth initiatives.
Boston Scientific expects to incur total pre-tax charges of about $175 million to $225 million as a result of the global restructuring.
"We are taking these steps to build on our momentum and meet the challenges of affordable healthcare around the globe," said Mike Mahoney, CEO and chairman of Boston Scientific.
"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," he added.
The Massachusetts-based company has until recently been weighed down after it paid $27 billion for pacemaker manufacturer Guidant in 2006.
Last year, it paid $600 million to Johnson & Johnson to settle a lawsuit filed by the latter seeking more than $7 billion in damages from Guidant, for having breached its merger agreement by taking Boston Scientific's buyout offer.
The Guidant acquisition was called the second-worst deal in history by Fortune , and has haunted Boston Scientific since it was announced.
Soon after it won a bidding war against Johnson & Johnson, Boston Scientific had to pay millions for lawsuits and government investigations related to problems with Guidant's heart-devices.
Between 2006 and 2012, Boston Scientific had written down around $9 billion, mostly related to Guidant, and again took a $3.6 billion writedown in 2012.