While some companies have recently announced mass layoffs within medtech, Medtronic, over the last few weeks, have offered early retirement incentives to their employees as it seeks to cut costs before the end of its fiscal year in April. The company, which reported more than 95,000 employees worldwide at the end of its last fiscal year, has not yet said anything specific about potential layoffs.
The new retirement offer had to be accepted between Feb. 13 and March 6 and requires those employees to leave Medtronic on or before April 28. Those who opted to accept the “irrevocable” offer will have to sign release forms by June 30 in exchange for the benefits. The forms will release the company from liability of known and unknown legal claims like wrongful discharge or employee discrimination. Of note, employees who decided to take advantage of the plan but decline to release Medtronic from claim will remain terminated without the early retirement incentives.
This is not the first time in recent years that Medtronic has used the strategy of early retirement to potentially avoid layoffs — along with the severance, unemployment and legal costs that follow. In summer 2020 — while deep in the trenches of the COVID-19 pandemic — the company also offered the option. Later, in September 2020, the Fridley, MN-based company announced a multiyear reorganization to cut hundreds of millions of dollars from its expenses, including employee reductions. However, they did not report specific employee counts in its annual reports.
To be eligible for the program, employees had to be from the United States, aged 54 or older as of Jan. 1, 2023, be actively employed by Medtronic for a least 90 days as of Jan. 1, 2023, participate in Medtronic’s retirement plans. Additionally, no employee at senior vice president level or above was eligible for the voluntary early retirement program (VERP). Staff who joined the company via the acquired Affera or Intersect ENT were ineligible, as well as employees in the company’s global operations & supply chain and global operations quality organizations, those in cyber information assurance, cybersecurity, medical safety, or network jobs.
Employees that opt-in for VERP, depending on specific situations, will get an added five points to pension plans and a one-time &10,000 contribution to retiree medical accounts or health reimbursement accounts. Additional employer contributions for certain 401(k) plan participants were also offered.
“Whether you have thought about retiring soon or didn’t think you could, the Program may help you reconsider your plans,” Medtronic wrote in its publicly available VERP literature. “Early retirement can open the door for new opportunities for you to explore. It can mean you’ll finally have more time to travel, take up a new hobby, volunteer, or maybe just enjoy more time with your family and friends.”