UPDATE 2-Boston Scientific to cut 2,300 jobs, restructure
(Adds percentage of jobs cut, company no comment on terms of business sale)
By Bill Berkrot
NEW YORK, Oct 17 (Reuters) - Boston Scientific Corp (BSX.N) said on Wednesday it would cut about 2,300 jobs, or about 9 percent of its workforce, and restructure or sell several business units as part of its efforts to reduce operating expenses.
The medical device company, saddled by debt since its $27 billion acquisition of Guidant Corp and hampered by slowing sales of its most lucrative heart devices, has been moving to try to improve its flagging share price. Boston Scientific shares are down nearly 45 percent since early 2006.
The company said it will record total pretax charges of about $450 million to $475 million, or 20 cents to 22 cents per share. About $275 million to $300 million will be taken in the fourth quarter, with the remainder recorded throughout 2008 and 2009.
The move is expected to cut operating expenses by $475 million to $525 million in 2008 -- a reduction of 12 percent to 13 percent -- and by about $25 million to $50 million more in 2009, the company said.
The job cuts will begin this month and are expected to be completed by the end of 2008.
"The expense and head count reductions we are announcing today are intended to bring our expenses back in line with our revenues," Chief Executive Jim Tobin said in a statement.
The said company has entered into a definitive agreement to sell its Auditory business, which sells cochlear implants. A Boston Scientific spokesman declined to comment on the terms of the deal.
It is also actively seeking buyers for the combined Fluid Management/Oncology Venous Access business, as well as its Cardiac Surgery and Vascular Surgery businesses.
Those businesses represent about $550 million in 2007 sales, the company said.
In August, Boston Scientific decided not to sell its endosurgery business, which accounts for about 16 percent of overall sales.
Boston Scientific shares edged about 1 percent higher to $14.30 in after hours trading from their New York Stock Exchange close of $14.14. (Reporting by Bill Berkrot)
