Boston Scientific to shed 175 jobs.

Bobeagleburger

Sign of the times I guess

Boston Scientific has confirmed that it plans to reduce its workforce by up to 175 jobs.
It has a total workforce of 3,000 at its facility in Galway.
A spokesperson said Boston Scientific remains strongly committed to its operations in Ireland, which is recognised as making a significant contribution to the organisation's global operations network.

http://www.rte.ie/news/2010/0208/bostonscientific.html

majiktripp

Saw that alright on the news there, one of the larger employer's in Galway too, not a good sign unfortunately.

hyperbaby

That really sucks...

Fozzie Bear

I know someone who works in Boston. They were saying to me last week that Boston Scientific lost a court case in the U.S. to Johnson & Johnson and as a result have to pay them $1.4 billion in compo. My friend was saying that this was going to result in lay offs in the coming weeks. Looks like they were right unfortunately.

Arnold Layne

I also heard that they have a new facility opening soon in Costa Rica. Hopefully there isn't more redundancies in the pipeline.

Das Kitty

Medical device companies are always always in litigation over copyright infringement and making payouts to one another, it's unlikely to be just one thing that's resulting in the layoffs. As for the Costa Rica plant it's likely they'll move some established low skill products over and maybe bring some new products to Galway that are in the R&D phase.

The thing is corporations need to be able to expand and contract to remain competitive and keep operating, it sucks for the 175 but it'll probably save more jobs in the long run.

cardoor

Fozzie Bear wrote: »

I know someone who works in Boston. They were saying to me last week that Boston Scientific lost a court case in the U.S. to Johnson & Johnson and as a result have to pay them $1.4 billion in compo. My friend was saying that this was going to result in lay offs in the coming weeks. Looks like they were right unfortunately.

Really doubt this is the case as Medical Device Companies sue each other every week and $1.7 billion is not a lot of money for these boys.
Google; Guidant, Metronic, J&J, Abbot with the words "law suit" and you will see.

They purchased a company here in Galway called Labcoat and pumped a load of money/people into it since but have decided not to go with the technology so its a lot of money down the drain.

Obmas Health Reform ideas also work against these Medical Device companies and these companies have spent billions on campaigning against it.

They will find it hard to compete against countries like Costa Rica were wages are a fraction of the cost here. I reckon more jobs will go in other big companies soon. Its only the tip of the iceberg.

cremeegg

bad news..

cooperguy

I wouldnt be too worried about it. Dont get me wrong, it sucks for the people who lost their jobs but it regularly happens in that industry. As demand for a product rises and falls it has a big impact on staff because its fairly labour intensive. They were all temporary contracts for that reason. This time 6 months or a year they could easily be hiring again.

rocky

Are any of these the 45 or so jobs that Mary Coughlan announced in de knowlege economy the same day Tom Hogan closed across the road? :mad:

MeYou

All the job losses announced today are limited to production staff but it is not just temporary employees being let go, full time employees are in the firing line too...

airvan

That's right. They've been letting temporary and short term contract workers go for a long time. I used to work there and was on a recurring three month or six month contract like everybody else who came in with me. If I hadn't left when I did. I'd probably be out now anyway.

The problem with the short term jobs is that they are never mentioned as job losses. You never hear about them on the news. But they must have let go scores of people. I hear that one room I used to work in which had 8 or 10 lines is now down to 2 or 3. What happened to the people who used to work those lines?

I'd say the 175 are full time employees.

But it's fair to say, companies like Boston Scientific often cut jobs even when times are good. It doesn't mean they are in any real trouble, yet. I got redundancy back in 2005 from a big multinational who were raking in the money at the time. It was just that they decided to close the plant I was working in and move it to Singapore.

HxGH

dun dun dunnnnn...

King Nut

It's small consolation to the people in the firing line but the fear around the plant was that the cuts would be much deeper. Hopefully this will be filled voluntarily, believe it or not even in the current economic climate there are people who will jump at this.

MeYou

The 175 job losses are restricted to the Galway plant only. However, market analysts and shareholders have been pushing for restructuring and a trimming down of the company.

The company will release it's figures for 2009 this Wednesday and an investor con-call with the CEO is being held on Thursday and it is widely believed that more job losses, this time affecting the whole company, will be announced or hinted at during that con-call.

Remember, the company is top heavy with multiple (and unnecessary) management layers and lots of engineers, all of whom get paid much more than production staff.

I fear that the axe hasn't stopped swinging yet, it might only just be getting warmed up.

I'll gladly be proven wrong, I don't want to go on the dole just yet.

PomBear

I think we all expected this to happen at some stage. The worst thing for us is that we have to expect it because of piss poor governing here in Ireland the US

Amhran Nua

cardoor wrote: »

They will find it hard to compete against countries like Costa Rica were wages are a fraction of the cost here. I reckon more jobs will go in other big companies soon. Its only the tip of the iceberg.

Costa Rica isn't in the EU free trade zone though, nor is it offering a low corporate tax. As far as I can see their stent business has been suffering for a while from increased competition. I seriously hope it doesn't lead to more layoffs, without the likes of them and Medtronic Galway is finished.

Gross profit fell 7.2 percent to $5.58 billion, and net loss more than quadrupled, going from $495 million in 2007 to $2.03 billion last year. The company prepaid $1.4 billion in debt in 2008 and reduced operating expenses by more than $500 million. It also maintained a $1 billion investment in research and development, a move executives said is necessary to foster new product development and innovation.

Despite its overall losses in net sales and profit, Boston Scientific reported some notable gains in several of its business units. CRM sales rose 7 percent to $2.43 billion, and Endosurgery Group product sales climbed 8 percent to $1.37 billion. Neuromodulation product sales jumped 20 percent, going from $204 million in 2007 to $245 million last year. Neurovascular sales increased 2 percent to $455 million.

For the second consecutive year, sales of Boston Scientific’s drug-eluting and bare metal stents declined. In fiscal 2008 (ended Dec. 31), drug-eluting stent sales totaled $1.63 billion, an 8.6 percent decrease compared with the $1.78 billion the company reported in 2007. Bare metal stents slipped 9 percent, going from $239 million in 2007 to $217 million last year. Executives attributed the losses to increased competition and said the company’s share of the U.S. drug-eluting stent market dropped to 46 percent last year from 55 percent in 2007.

Last year’s losses in stent sales were somewhat offset by gains in sales of implantable cardioverter defibrillators (ICD) and pacemaker systems. ICD sales rose 9 percent to $1.68 billion, while pacemaker revenue increased 3.9 percent to $605 million. Combined sales of ICDs and pacemakers climbed 7.6 percent last year to $2.2 billion.

Is it mostly stents they do in the Galway plant?

Arnold Layne

Amhran Nua wrote: »

Costa Rica isn't in the EU free trade zone though, nor is it offering a low corporate tax. As far as I can see their stent business has been suffering for a while from increased competition. I seriously hope it doesn't lead to more layoffs, without the likes of them and Medtronic Galway is finished.

Costa Rica may not be in the EU Free Trade Zone, but there is nothing stopping BSC from transferring some of the front end of production to Costa Rica as the wage & operating costs are lower. The subassembled products can then be shipped back to Ireland as inter company components and the final stages of the product assembled here where it will be packaged & sterilised for the European market. This way BSC can avail of grants in both countries.

Medtronic have been looking at something similar with their plant in Juarez, Mexico. Parts are already being assembled there and shipped to the Galway facility. There have been rumours circulating for the past 9 months in relation to more manufacturing stages moving to Mexico, but I believe that this has been put on hold for the short term.

Amhran Nua

Arnold Layne wrote: »

Costa Rica may not be in the EU Free Trade Zone, but there is nothing stopping BSC from transferring some of the front end of production to Costa Rica as the wage & operating costs are lower.

That might be suitable for certain low end products, but they end up paying import duties then which more than cancel out the corporate tax benefits. They also recently put in a fair bit of money into the Galway plant, which could be a positive sign.

We badly need our own domestic industries to offset situations like this.

unJustMary

Pretty much every multi-national, and every well managed Irish company for that matter, will move activities to "lower cost geographies" when it makes sense to do so.

And to be fair, I don't actually have a problem with folks in India or China having jobs. They have as much right to make a living doing what they're good at (ultra-large scale manufacturing, for example) as any other people in the world.

It's entertaining is working in a multi-national, and watching Americans try to get to grips with the news that the reason the call-centre (or whatever) in Mumbai (or wherever) isn't operating today is that there was a bombing, some of the workers are dead and the rest were to scared to travel in today, hopefully they'll be in tomorrow. Or meeting the Indian senior-ish manager who was brought over here to learn some specific things for a week, and and hearing about how she catches the train to work, just like all the workers (no way would an Irish manager of similar status even consider not driving).

King Nut

The point on multinationals relocation is valid but it is important to remember in an industry as highly regulated as med devices and pharma there are many factors other than cost which have to be considered. I believe we will hold on to a large part of that business in the short term and that taking a longer view the most serious threat in terms of companies relocating comes from other (mainly eastern & central) European countries. In this time of gloom the reputation Ireland has won for world class manufacturing and R&D is something I hope the govt can take advantage of and actively work to reduce incentives to the multis to relocate. Great to see local companies like Creganna emerge also, more than anything that is what we need.

My 2c....

MeYou

The CEO of Boston Scientific announced the loss of 1000 to 1300 jobs (8% to 10%) last night.

These job cuts, from my reading of the press release, will not affect product builders (operators), it does however affect managers, engineers, supervisors, etc.

In other words anyone who does not physically make the product is at risk.

Bobeagleburger

MeYou wrote: »

The CEO of Boston Scientific announced the loss of 1000 to 1300 jobs (8% to 10%) last night.

These job cuts, from my reading of the press release, will not affect product builders (operators), it does however affect managers, engineers, supervisors, etc.

In other words anyone who does not physically make the product is at risk.

This true?

1000-1300 in Galway?

EDIT, yeah see it here.It's 1000-1300 worldwide.

http://www.nasdaq.com/aspx/stock-market-news-story.aspx?storyid=201002102017dowjonesdjonline000689&title=2nd-update-boston-scientific-restructuring-posts-4q-loss

MeYou

Whoops, I did leave out the word worldwide. Yes, these job cuts affect the whole company and not just Galway.

We just need to wait and see how many jobs go in Galway.

alibabba

Word on the street this morning is Boston Sci are planning to shut down for week around Paddys Week ?

Arnold Layne

alibabba wrote: »

Word on the street this morning is Boston Sci are planning to shut down for week around Paddys Week ?

I think they did the same last year as well.

fergiesfolly

Arnold Layne wrote: »

I think they did the same last year as well.

No, they didn't. And there isn't any talk of it this year either. A lot of people are taking an extended break, off their own bat, so they might just consider doing it but thats it.

redsteveireland

alibabba wrote: »

Word on the street this morning is Boston Sci are planning to shut down for week around Paddys Week ?

So..alot of plants close to facilitate major maintenance etc. and I don't think this has any special relevance.

coup1917

alibabba wrote: »

Word on the street this morning is Boston Sci are planning to shut down for week around Paddys Week ?

There will be a lot of production shutting down for Paddys week and Race Week is looking quiet this year as well..

Jack Daniels I

65 more jobs to go now.mostly higher level but 20 further product builders on top of 175.2 plants now opened in Costa Rica,not looking good.would be a disaster for galway

maninasia

This is a normal part of ups and downs of these companies. This industry is highly regulated, niche experience based and capital intensive. They can't just build a plant somewhere else overnight, even if they did it's very risky due to chance of f^&kups in production and QC.