Boston Scientific Announces Restructuring, Job Cuts

In an effort to cut costs, Boston Scientific Corp. (Natick, MA) today announced a major restructuring that will include more than 1,900 layoffs.

Manufacturing operations will be expanded in Miami; Cork, Ireland; and Galway, Ireland. Manufacturing operations in Plymouth, MN; Redmond, WA; and Watertown, MA will be shut down.

The company says that the actual number of job cuts will only be about 1,000 because new jobs will be added in other facilities. The number of positions will be reduced from approximately 13,000 to 12,000. Approximately 900 positions will be transferred to facilities in Miami and Ireland.

Restructuring plans include a supply chain initiative intended to result in reduced inventory levels, lower inventory holding costs, and reduced inventory write-offs; a process control initiative focused on improving yields and manufacturing efficiencies; and a plant optimization initiative to create a more effective network of manufacturing and research and development facilities.

The plant optimization initiative will consolidate manufacturing operations along product lines, shifting significant amounts of production to company facilities in Miami and Ireland and to contract manufacturing. It will also concentrate research and development activities in a smaller number of specialized facilities.

The plan is estimated to achieve net pre-tax savings of $110 million ($70 million after-tax) in 2001, $220 million ($145 million after-tax) in 2002, and $250 million ($180 million after-tax) in annualized savings thereafter. The plant optimization initiative is expected to result in pre-tax charges of approximately $70 million ($45 million after-tax) in 2000.

"This plan will enable us to intensify our focus on operational excellence and increase our commitment to innovation," said president and CEO Jim Tobin. "Above all, it will help us continue to provide our customers superior technology. This is a forward-looking plan that says innovation is our future, and that we're creating the opportunity to make the necessary investments to support innovation and a robust future."

"Over the past several years, we have grown rapidly through acquisition and have become a truly global organization," said Pete Nicholas, chairman of the board. "The plan consolidates our operations and better allocates the company's resources in a way that allows us to more aggressively invest in innovation and prepare for future growth."

Edited by Ursula Jones