As part of its vast restructuring in which Medtronic Inc. (NYSE:MDT) is reducing 2,000 positions worldwide, the world’s largest medical device maker is cutting 82 jobs in Memphis, Tennessee.
Medtronic’s spinal and biologics unit is based in Memphis and employs 1,500 people, according to The Commercial Appeal. The layoffs will begin Tuesday and be completed by July 3.
The company’s spine division has been hurting for a while. In a May 24 conference call, CFO Gary Ellis said overall, spinal fourth-quarter revenue of $875 million fell 2 percent. Kyphon revenue, part of Medtronic Spine, dropped 9 percent and it appears that the vaunted multibillion-dollar acquisition of Kyphon is yet to bear fruit. Medtronic paid $3.9 billion to acquire Kyphon in 2007.
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In the conference call, JP Morgan analyst Michael Weinstein said he was very surprised by how much bulk orders fell in the company’s spine division and that in the U.S., performance was far short of what Wall Street was expecting.
Biologics revenue, on the other hand, grew 4 percent to $227 million in the fiscal fourth quarter, boosted by a recent acquisition. However, sales of Infuse, the company’s top-selling bone growth product, declined. And the product has invited some scrutiny both overseas and in the U.S. recently. It’s unclear what the impact of those would be on Medtronic, which makes new innovative medical devices, in the future.
