Boston Scientific cutting 1,400 jobs, outsourcing 1,000 to China

Categories: Business
j raymond elliott.jpg
J. Raymond Elliott's company is cutting 1,400 jobs.
On the heels of a 50 percent profit increase, medical device company Boston Scientific, which employs more than 5,000 people in Minnesota, announced a restructuring plan that would cut up to 1,400 jobs from its current workforce.

If cutting jobs when the company's doing well doesn't make sense, there's this: Boston Scientific also announced a new $150 million project in China, which will result in 1,000 new jobs over there. If you think they're  doing well now, imagine how much money they'll make if they don't have to pay anyone a living wage!

In an audacious moment, CEO J. Raymond Elliott called the restructuring plan "great news for our employees."

Of course, the real great news came this morning, when the BSX stock market symbol shot up the charts -- as of 10:30 central time, Boston Scientific stock was up 9.4 percent today.

There's no indication on which locations will suffer the brunt of those 1,400 lost jobs. Boston Scientific has more than 5,000 employees at its offices in St. Paul, Maple Grove and Plymouth.

The news came in a press release, explained in that wonderfully subtle business language.

The Company anticipates the reduction of 1,200 to 1,400 positions worldwide through a combination of employee attrition and targeted headcount reductions as the program is implemented. Plans detailing specific employee impacts will be developed for each affected region and business, and the Company will consult in due course with relevant employee representative bodies, where required under local laws.
Translation: A bunch of you are getting canned. We'll let you know.

Earlier this week, Boston Scientific announced second-quarter profits of $146 million, up 49 percent from last year's second quarter.

In the press release, J. Raymond Elliott described the layoffs and outsourcing as "a productivity-focused restructuring program and an additional investment in China, all of which are key steps on the path to achieving our goals."

He went on: "That's great news for our employees, shareholders and customers!"

Yes, it is! Except for those of you who Boston Scientific is "restructuring" out of a job!

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green23
green23

Once again, Kirk has a weak grasp of the facts. Once again, he rants at length without understanding what he is talking about.

The medical device tax is on revenues of U.S. sales. This means, Kirk, that Boston Sci will *continue* to pay the tax -- just not on sales made in China.

Let's set aside your assertion that a 2.3% excise tax is "extremely expensive". Let's set aside your implausible inference that "Unions" have anything to do with this.

Boston Sci is obviously profitable, so this tax is not making them unprofitable and forcing layoffs. I see this as extortion. They might as well be demanding that the taxpayers hand over billions in gold bullion or else they lay off thousands.

Interesting that the press release didn't mention a single one of your talking points.

Kirk the Conservative Jerk
Kirk the Conservative Jerk

You mean an Amy Klobuchar "talking point"?

And 2.3% (if that is what it is) is a lot when placed on a 10% net profit.

So why did they cut the U.S. workforce?

BTW, lets try to post on a comment if that is what you are commenting on.

FAW
FAW

It is inaccurate to use the term "outsourcing". The Chinese jobs are sales and regulatory jobs that are opening up due to China being able to afford medical devices for the first time. The positions aren't the same as the jobs being eliminated and it is naive to think the people affected are qualified to be a sales representative or regulatory associate in China.

Kirk the Conservative Jerk
Kirk the Conservative Jerk

Yeah Obama Care!!!! Yeah Obama!!!!Yeah Unions!!!!Yeah Big Government!!!!

Per the record, Boston Scientific is not one of the 1,400 business and group that received a waiver from Obama Care and the extremely expensive mandates To medical device manufactures within the Obama Care Bill.  Hmmm, I wonder if the Obama Care mandates had to do anything with Boston Scientific's decision?  Remember Amy Klobuchar tried to warn us this would happen because of the TAXES on medical device manufactures per the Obama Care.  In late March, Democrat Amy Klobuchar of Minnesota and Republican Scott Brown of Massachusetts launched a new Senate medical technology caucus to increase awareness about issues facing the industry in relation to Obama Care. Both Senatorsrepresent states with significant medical device manufacturers and have been major beneficiaries of industry money. Boston Scientific, which in 2010 had $7.8 billion in sales, is based in Brown’s state.

It's a sad day when communist China is more appealing to business than America.

Citypages MUST be absolute giddy, known that they were some of the ones who were HUGE champions of Obama Care and the repressive taxes to medical device manufactures.    Citypages = 1Jobs for Americans = 0  (actually -1,400)

Michelle Bachmann
Michelle Bachmann

Companies move to China for two reasons.   1) China is an emerging market.   Companies often try to capitalize on emerging markets to make profits.  2)  China has an oppressive dictatorship that makes sure Chinese workers have no rights.    This economic system results in low labor costs but horrible quality of life for workers.   

It is astounding how stupid a person would have to be to think that a company would move to a country run by dictators to avoid government regulations.  

Here are some facts that back up my point and make kirk look stupid.  "The US has one of the lowest unionization rates among industrializedcountries. Where 16.4% of workers are unionized in the US, 26.8% areunionized in Japan and 33.8% are unionized in Germany. Sweden, with oneof the highest standards of living in the world and one of the lowestunemployment rates over the last 20 years, has a 85.3% unionization rate.

Note that with a lower unionization rate, the US had the highest drop inmanufacturing employment of those countries (over 30% drop inmanufacturing employment. Germany lost only 7.8% of its manufacturingemployment, while Japan gained 13.6%

The US also had the lowest productivity gain in all sectors of the economyover the last twenty years.

In the US, 40% of manufacturing employees have to change jobs in eachyear. Only 25% of German workers have to seek out a new job each year,and only 18% of Swedish and Japanese workers switch jobs.

Unions keep managers from being overpaid relative to average workers:In the US, a CEO makes 17.5 times as much as the average worker.In Japan, a CEO makes only 11.6 times as much.In Germany, a CEO makes only 6.5 times as much."The problem with the United State isn't unions, its conservative idiots like you.

Guest
Guest

I think it's pretty sad when you make comments like "It is astounding how stupid a person would have to be to think that a company would move to a country run by dictators to avoid government regulations". as a matter of fact, that is exactly why companies did go to China, no government regulations and it was easy money to make corrupt deals by just paying a few extra dollars on the side (to the tune of over $300 million in the 1970's when it was investigated by the SEC). And as you should know, since you are so well informed, that the U.S. government, has  "regulated" that these corrupt deals are no longer allowed. And in recent 2010. America's Foreign Corruption Practices Act has added a whistleblower component with the enactment of the Frank-Dodd act, that attempts to level the playing field. But guess what, even with those additional regulations, it is easier for companies to be regulated in China and bring the net margin back than to be taxed to suffocation in the United States, and as a business owner, I am thoroughly familiar with the ever tightening noose around my neck. As far as comparing European workers to US, again, you are totally misled. The educational systems in Europe are set up to deliver an entire skilled labor force. We have nothing like that here, and beyond that, those countries that you mentioned are all in desperate financial trouble in large part because of the entitlement payments they have to pay to their no longer employed union skilled labor worker (except for Sweden which has a total population of under 10million - you can call it a country but it's not even as big as NYC).

Please stop with trying to educate with the limited soundbites that you have been droned to repeat. 

Guest
Guest

Wiat a minute! Are you telling me that American corporations don't care about their employees or the state of American communities? But I thought that CEO's wanted nothing more than to create American jobs, if only they weren't hindered by profit-restricting regulations. Maybe we should cut taxes more and abolish minimum wage to see if they'll come back and bless us with their approval and employment. At least China is getting help. And I'm sure Mr. Elliot will get a nice bonus for his hard work.

Nice
Nice

Shareholder value Über Alles!

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