Medtronic Inc. may be in the process of reducing its global workforce by nearly 5 percent, or 1,500 to 2,000 jobs, but there are two countries in the world where the medical technology giant is in fact hiring: China and India.
Fridley, Minnesota-based Medtronic recently announced that it plans to hire 1,000 workers in China and more than 600 workers in India over the next five years.
The new jobs aren’t replacing positions the company is cutting elsewhere in the world, but instead represent strategic thinking on the part of Medtronic executives who are adding staff where company growth is accelerating, while reducing staff numbers where growth is slowing, said Medtronic spokesman Brian Henry.
Gary Ellis, Medtronic’s chief financial officer, said something similar during the company’s third-quarter conference call when analysts pressed him to provide more details about Medtronic’s layoffs. “Whether it’s emerging markets or some of these emerging therapies or obviously in some of the acquisitions, that’s not where we’re going to be primarily focused,” Ellis said of the restructuring.
Instead, the layoffs more involve “businesses and geographies, developed markets, for example, where it’s been a little slower, where the markets have slowed down,” Ellis said.
Henry declined to provide further details about the Medtronic restructuring. “We’re still in the process of determining what our next steps are,” he said.
China, India and other emerging markets are indeed growth areas for Medtronic. The company presently receives about one-tenth of its annual revenue from such countries; Medtronic expects it to grow to one-fifth by 2020.
A Deep-dive Into Specialty Pharma
A specialty drug is a class of prescription medications used to treat complex, chronic or rare medical conditions. Although this classification was originally intended to define the treatment of rare, also termed “orphan” diseases, affecting fewer than 200,000 people in the US, more recently, specialty drugs have emerged as the cornerstone of treatment for chronic and complex diseases such as cancer, autoimmune conditions, diabetes, hepatitis C, and HIV/AIDS.
“We’ve been making over the last several years big investments to take advantage of what we think — we think that China will be a very strong market for years to come. India is a bit behind, but we’re seeing very good growth rate in India. Latin America is doing very well,” Medtronic CEO William Hawkins said in the company’s third-quarter conference call.
To underscore this point, Hawkins was in Asia himself last week. He officially opened a Singapore cardiac devices manufacturing facility that will also start serving as Medtronic’s Asian distribution hub later this year; Medtronic will have invested $56 million in the facility by the end of 2011.
Hawkins last week also officially opened Medtronic’s new regional headquarters building in Shanghai, China.
