Medtronic is eliminating some employee positions in its Spine business, part of an overall strategy to reduce costs by 5 percent in that business segment in the new fiscal year.

April 16, 2013

1 Min Read
Medtronic is Looking to Achieve 5 percent Cost Reduction in its Spine Business

Medtronic has been hurting for a while in its spine business, which is facing headwinds from myriad angles - pricing pressure from smaller competitors, declining markets as well as the failure of a multibillion-dollar acquisition. The company has also been embroiled in controversy regarding its InFuse spinal fusion product, whose sales have plummeted over the years.

Now there's a report that Medtronic is laying off some workers in the Spine division in Indiana.

Medtronic spokeswoman Cindy Resman confirmed that Medtronic Spine is looking to shave 5 percent of its costs in its new fiscal year, which begins in late April. Layoffs will be just one strategy to achieve that goal, Resman said.

That obviously raises the question of what else the company can do to cut costs.

There has been speculation over the years over whether Medtronic can simply sell the spine business or parts of it.

Analyst Glenn Novarro of RBC Capital Markets thinks that is very unlikely.

Whatever the company decides, it will likely spell it out in the near future, given that the Spinal business is the second-largest business segment of the Minnesota device maker.  

-- By Arundhati Parmar, Senior Editor, MD+DI

Editor's Note: Susan Drapeau, Director Biologics R&D, Medtronic Spinal & Biologics and Roy C. Wiley, Sr. Director of Manufacturing and Warsaw Site Leader, Medtronic will be speaking at Orthotec, taking place June 5-6 in Winona Lake, IN. 

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