Baxter Cuts 1400 Workers, Hires Ex-Covidien CEO

After a rough third quarter, Baxter has announced layoffs, and its plans to name José Almeida as its new chairman and chief executive officer, effective January 1, 2016.

Nancy Crotti

Baxter saw its profits nosedive in the third quarter of the year, which was partly a result of costs linked to spinning off its pharmaceutical business. To help bring costs down, the company is cutting roughly 5% of its non-manufacturing payroll by the end of the year.

The company also announced that former Covidien chief José Almeida (pictured), 53, will succeed Robert L. Parkinson Jr., the company's chairman and CEO since 2004. Parkinson will become chairman emeritus.

The former president and CEO of Covidien, plc, Almeida brings experience in the global medtech market to Deerfield, Il-based Baxter. He spent eight years at Covidien before Medtronic purchased it for $52.6 billion in January 2015.

Almeida served as chairman, president and CEO of Ireland-based Covidien from 2012 through 2015, overseeing its merger with Medtronic. Prior to that, Almeida was president of Covidien's medical devices organization, where he oversaw several businesses accounting for approximately two-thirds of the company's total annual revenues and about three-quarters of its operating profit.

Almeida has also held leadership positions at Wilson Greatbatch Technologies, Inc., American Home Products' Acufex Microsurgical division, and Johnson & Johnson's Professional Products division. He began his career as a management consultant at Andersen Consulting (Accenture).

Almeida became the second high-profile medtech leader to join Baxter this month, after Boston Scientific Corp. CEO Mike Mahoney was named to the board, according to a report by Bloomberg. Baxter's biggest shareholder, Third Point LLC, has pursued new leadership after saying in August that the company was undervalued.

One of the world's largest medical device manufacturers, Baxter spun off its biotechnology and pharmaceuticals business, Baxalta, Inc., earlier this year. Almeida told Bloomberg that he plans to review each of Baxter's businesses in the next 120 days to determine the company's future course.

Baxter makes infusion pumps, surgical tools, and dialysis systems for kidney disease.

Nancy Crotti is a contributor to Qmed and MPMN.

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