Layoffs Hit Medtech Hard in January 2016: Infographic

Late last year, the industry rejoiced that the much-maligned medical device tax had been repealed for two years. Despite the repeal, 2016 kicked off with 3329 layoffs being announced between J&J, Abbott, and Bard.

Qmed Staff

Layoffs in the medtech industry have been cited as one of the reasons behind the push to repeal the medical device tax.

A 2013 AdvaMed report estimated that, at that time, the tax had already resulted in losses of 33,000 jobs, which entailed 14,000 layoffs and another 19,000 jobs that were lost as a result of "forgone hiring." The tax went into effect on January 1 of that same year. 

Whatever role the device has played in the significant layoffs in the industry in recent years, the latest wave of layoffs is perhaps evidence that a repeal of the device tax in itself is not enough to stave them off. It is, of course, too early to make any definitive judgments on the matter, and it is worth noting, too, that the bulk of the layoffs came from Johnson & Johnson, a company that has been in the process of restructuring its medical device business over the years.

Abbott has also been restructuring its business over the years as has CR Bard, which announced a significant restructuring effort in 2010.

Reflecting back to 2012--a year before the tax went into effect--indicates that significant layoffs were hitting the industry then:

CR Bard had also announced its own layoffs in this time frame as well.

Whatever the cause of layoffs in the industry, the month of January could perhaps be an omen that the medical device industry is still in the throes of a significant transition.

This theme is supported by the unprecedented partnerships being announced between mainstream industry players like J&J (which is working with Google on surgical robotics) and Medtronic (which is working with IBM on smart diabetes monitoring technology).