October 25, 2013 | By Anabela Farrica
Medica device maker Boston Scientific is under the limelight again. On Wednesday, the Massachusetts-based company announced its plans of eliminating between 1.100 and 1.500 jobs in the next two years all around the world. This restructuring move – the company’s third since 2011 – will allow the company to save between $150 million and $200 million until 2015. Amongst the laid off employees is Jeffrey Capello, Boston’s CFO, who will leave at the end of year.
CEO Mike Mahoney said that cutting this number of jobs is part of the company’s plan to boost operating income margins from 19% to 25%. In spite of the fact that the latest quarter’s revenue ($1.74 billion) has not matched the value obtained in the same quarter of last year, the company’s EPS were higher than predicted. Some of the highlights of this quarter include a growth of 4% in the endoscopy division, 5% in the women’s health division and 1% in CRM. In addition, several analysts consider the medical device maker’s quarter, and overall growth, to be quite positive.
Thus, these job cuts arise not as defensive measure (something that has happened in the past), but as a part of an offensive strategy. With the cuts, Boston Sci will be able to allocate more resources towards the development of new products and other initiatives.
The company said CFO Jeffrey Capello will leave because he wants to find a broader management position outside the company. Daniel Brennan, Boston Scientific’s corporate controller and senior vice president, will become its new CFO.