Covidien (NYSE:COV) will close a manufacturing facility in Seneca, S.C., and move the operation to Costa Rica, resulting in nearly 600 layoffs.
The Seneca facility manufactures vascular products for the Mansfield, Mass.-based medical device company.
A Covidien spokesman told Reuters that the cuts were a response to a "challenging healthcare environment where companies face pricing pressures and reimbursement issues."
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The layoffs represent the latest in a series of cost-cutting moves made by large medical device companies in the past several weeks that have resulted in the loss of more than 1,500 jobs across the industry.
In late August, St. Jude Medical (NYSE:STJ) said it would lay off 300 employees in an effort to reduce annual pre-tax operating expenses by about $50 million-$60 million beginning in 2013. That announcment came on the same day word leaked of Boston Scientific‘s (NYSE:BSX) plans to cut jobs and split its cardiac device business back into 2 operating units. The number of cuts at BSX was not announced.
Last week, Medtronic (NYSE:MDT) said it was halfway through a 2012 restructuring plan in which the company expects to let go of 1,000 employees from divisions around the world by the end of the year.
And earlier this week, Welch Allyn announced plans to cut 275 jobs in response to the upcoming 2.3% medical device excise tax.
Covidien, which has more than 40,000 employees worldwide, said the Palmetto State plant will be closed over the next 3 years. The vascular division alone has more than 4,000 employees. Earlier this year, the company named Stacy Enxing Seng president of its $1.4 billion global vascular therapies business. She joined Covidien in July 2010 after the company spent $2.6 billion acquiring ev3 and its Pipeline embolization treatment for cerebral aneurysms.
In its recent earnings release, Covidien said profits slipped 15% during the 3rd quarter, to $453 million, on sales of more than $3 billion. However, the company has increased its bottom line 2%, to more than $1.4 billion, for first 9 months of the year (on $8.85 billion in sales).
The company’s vascular division pulled in $418 million during the 3rd quarter, a 14% increase from $368 million during the same period last year.
In April, the company bolstered the division with its acquisition of Maya Medical, marking Covidien’s entry into the hot renal denervation market.
The post Layoffs: Covidien to shutter South Carolina plant, cutting 595 jobs appeared first on MassDevice.