Abbott Laboratories has announced that it will lay off 700 employees as part of ongoing restructuring efforts. 300 of the redundancies are expected to come from the company’s Stent Division in Southern California.
According to a press release, Abbott has seen a decline in revenue from its stent business which was 8.8% lower in USA compared with prior year. The companies supply agreement with medical device rival Boston Scientific Corp is due to expire shortly. Abbott currently sells a version of its Xience stent to Boston Scientific, which pays a 40 percent royalty on sales. Boston Scientific recently replaced that device with its own in-house stent, Promus Element.
The balance of the redundancies will come from the company’s diagnostic business in Illinois and its pharma manufacturing operation in Puerto Rico.
News of the layoffs came several hours after Abbott reported a 12 percent increase in fourth-quarter profit Wednesday, as the blockbuster anti-inflammatory drug Humira continued to dominate the company’s performance with double-digit sales growth.
Recently announced full year financials for 2011 show double-digit earnings per share growth Q4 and 2011. The company is forecasting another year of strong performance for 2012 with ongoing increases in earnings per share. Cost reduction initiatives are undoubtedly part of this story.
Source: Abbott Laboratories