January 8, 2016
By Alex Keown, BioSpace.com Breaking News Staff
CHICAGO – Abbott Laboratories has terminated is closing a Redwood City, Calif. Vascular device manufacturing facility and laying off 144 employees, FierceMedicalDevices reported this morning.
Abbott is shutting down the facility as part of an effort to increase the company’s competitiveness, reports said. Abbott said it informed the employees of the Redwood City site the facility would be closed back in 2014. A WARN notice was filed in December with the state of California.
The Redwood City site is not the only Abbott facility to feel the bite of the restructuring plan. The Temecula, Calf. facility, near San Diego, has steadily shed jobs since 2012 when approximately 4,000 people worked there. The Temecula plant, which makes equipment for cardiac surgery and recovery such as stents and scaffolds, was acquired by Abbott when it snapped up heart device maker Guidant Corporation for $4.1 billion in cash in 2006.
Abbott said in 2012 that it will be cut at least 700 jobs in Puerto Rico, California and Chicago, a year after slicing more than 1,900 positions all across the U.S. Illinois was hit that hardest in that wave of cuts, losing 1,000 jobs—a loss Abbott said was a direct result of stricter healthcare regulations globally.
Since the 2012 spinoff of AbbVie , Abbott has focused on increasing its generic-drug offerings in emerging markets, most particularly China, as well as adding new technology to the company’s device and diagnostics businesses. Abbott management approved plans to realign its vascular manufacturing operations and core diagnostics business in order to reduce costs, the company said in its latest quarterly report. Abbott’s stock is slightly up this morning, trading at $41.55 per share.
Abbott is not the only medical device company to slash jobs across California. In August, Boston Scientific , which manufactures medical devices, announced it planned to terminate 455 employees from facilities in Fremont and San Jose as it prepares to move its manufacturing to Costa Rica. Manufacturing at those two sites will cease by the end of October. The manufacturing shift to Costa Rica is part of the company’s efforts to streamline operations, MassDevice reported. The Fremont and San Jose facilities manufacture devices for electrophysiology and imaging, including coils, stent systems, retrieval devices, IVUS catheters, ultrasound imaging devices, ablation catheters, according to the company’s website.
In 2013, Boston Scientific announced it eliminated between 1,100 and 1,500 jobs worldwide as the company looked to streamline operations costs of up to $200 million. The company said the restructuring move could be accomplished by simplifying manufacturing and consolidating production lines.
Over a four year period from 2009 to 2013, more than 155,000 employees in the biopharma industry have been laid off as companies have scaled back research and development and eliminated manufacturing redundancies, BioPharmaDive reported. The terminations have increased as more and more M&A deals worth about $500 billion have been struck over the past two years. Mergers and acquisitions are often signals of coming pink slips due to overlapping efficiencies. As customer bases shift, that has also caused a need to reduce sales team members. Smaller investments in R&D have also caused a need for layoffs, BioPharmaDive said.
