Baxter is the latest in the medtech industry to undergo layoffs in 2023. The Deerfield, IL-based company said it was set to shed nearly 5% of its workforce in a costs-savings measure it announced along with 4Q22 earnings last week.
Baxter said the reduction was part of measures that would save the company more than $300 million in 2023.
The measure comes on the heels of Baxter joining the spinoff revolution with the separation of its Kidney Units.
José Almeida, chairman, president and CEO of Baxter commented on the measure during the firm’s most recent earnings call.
“From a manufacturing perspective, Baxter will become more nimble with manufacturing sites mapped directly to each GBU leading to an optimized manufacturing footprint in a more resilient supply chain,” Almeida said according to a Seeking Alpha transcript of the Call. “Preparation for the new operating model is already surfacing opportunities for streamlining and efficiency that are intended to further bolster bottom line performance. The redesign being contemplated, coupled with additional actions the company has undertaken to enhance performance, are expected to deliver more than $300 million in total savings during 2023 and a workforce reduction of less than 5%. We plan to begin implementing our new operating model early in the second quarter.”
According to the Seeking Alpha transcript for the earnings call, Almedia said, “And as I have stressed many times, we will never pursue reduced costs in ways that could compromise our fundamental mission to save and sustain lives. But even factoring in these headwinds, we did not perform at the level we expected and demanded of ourselves.”
Baxter isn’t the only company to announce layoffs this year. Earlier this month, Venus Concept said it was cutting its workforce by about 18%, which equates to 70 employees. The manufacturer of medical aesthetic devices replaced its former CEO late last year.
Philips made cuts in January – eliminating about 6,000 jobs to simplify its operating model in the wake of a massive recall that knocked off 70% of the company’s market value. The layoff round followed
Verily came under scrutiny in January after it cut about 15% of its staff in a company-wide email.
The latter part of 2022 was filled with layoff announcements from a list of companies that include, Pear Therapeutics, Invitae, Illumina, and Sema4.
Medtech is no stranger to restructurings or the reduction of personnel as cost-saving measures – but the recent spate of layoffs is similar to what happened in the industry in 2013.