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November 22, 2022
2 Min Read
Image courtesy of Dzmitry Skazau / Alamy Stock Photo
In 2013, MD+DI reported on widespread layoffs across the medtech industry, just as we're now seeing a spate of layoffs happening in medtech.
"Citing factors ranging from the need to offset the costs of the polarizing medical device excise tax and struggling business units to the desire to consolidate manufacturing, many medical device manufacturers are looking to layoffs as part of the solution," Shana Leonard wrote in May 2013.
Medtronic made 2000 cuts to its workforce in 2013, primarily affecting the company's spine and cardiac businesses.
Boston Scientific eliminated at least 900 positions worldwide that year, as part of a restructuring "expansion" plan that began in 2011.
Abbott shed 200 positions from its permanent workforce in Clonmel, Ireland in 2013, while also opting not to renew a number of contract positions. Soon after, the company also laid off 450 workers based in Temecula, CA, and that round of layoffs had been preceded a year earlier by a mass cut at the same facility that left 300 medtech professionals jobless.
Smith & Nephew handed close to 100 employees their walking papers in 2013. While the numbers weren't quite as devastating as those of Boston Scientific or Medtronic, that particular round of layoffs nabbed headlines because it blamed the cuts on the controversial 2.3% medical device excise tax and, in turn, provided ammo to critics of the device tax.
The fundamentally flawed medical device tax was highly criticized on both sides of the political aisle and was suspended twice before it was permanently repealed at the end of 2019. While a 2.3% tax may not sound like much, it was not a tax on profits, it was a tax on sales, and it hit small companies and startups particularly hard. The medical device tax was blamed for the loss of more than 29,000 medtech jobs.
Check back next week for a new Trivia Tuesday question on our home page and test your knowledge about the medical device and diagnostics industry!
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