Medtech Layoffs Exceed 3500 in January

Despite the two-year repeal of the medical device tax in the United States, 2016 kicked off with 3579 layoffs being announced between J&J, Abbott, Bard, and the woundcare company ConvaTec.

Brian Buntz

The Luxembourg-based woundcare company ConvaTec announced that it will shutter its Greensboro, NC-facility, eliminating 250 jobs.

Also in January, J&J, Bard, and Abbott, have announced their plans to lay off 3000, 185, and 144 workers, respectively.

In the case of ConvaTec, the company described the restructuring as "part of a company-wide project to expand margins across its global supply chain network."

In 2014, the company announced similar plans to close an office in Skillman, NJ, laying off 118 workers.

2015 was a difficult year for the company. In its third-quarter annual report, ConvaTec revealed that it had lost $184.8 million in the first nine months of that year alone.

It is possible that the employment picture for the medical device sector will improve this year following the temporary repeal of the 2.3% medical device tax after the Consolidated Appropriations Act, 2016 was signed late last year.

It's worth noting that in the case of the layoffs outlined above were arguably part of restructuring efforts that had begun months or years earlier. For instance, Johnson & Johnson had admitted throughout 2015 that its medical device division was struggling and that it was working on restructuring that business to help improve its profitability.

As for the two-year device tax repeal, the analyst firm GlobalData notes that the tax holiday could be especially beneficial for small and mid-sized companies.

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