St. Jude Medical (NYSE:STJ) announced Thursday that it is laying of 300 employees as part of a broader restructuring aimed to lower operating costs.
In a news release, the Minnesota medical device maker said that it is centralizing support functions in information technology, human resources, legal, business development and many marketing functions. The job cuts are expected to reduce pretax operational expenses by $50 million to $60 million per year.
Eighty of the total eliminated positions were in Minnesota, said a St. Jude Medical spokeswoman via email.
Along with the layoffs, the company is also reorganizing its business into two operating units — Implantable Electronic Systems Division (IESD), which will combine the company’s cardiac rhythm management business and the neuromodulation business; and the Cardiovascular and Ablation Technologies Division, which will comprise the atrial fibrillation business and the cardiovascular division.
“The reorganization we have announced today is part of a comprehensive plan to accelerate our growth,” said Daniel Starks, chairman, president and chief executive officer of St. Jude Medical. “We are focused on reducing costs, leveraging economies of scale, maintaining the highest level of quality and funding our entire portfolio of new growth drivers.”
The newly formed IESD will be led by Eric Fain, the former president of the cardiac rhythm management business. Meanwhile, Frank Callaghan, the former head of the Cardiovascular Division will lead the Cardiovascular and Ablation Technologies Division. The two executives will report to group President Michael Rousseau.
Four other executives are also seeing their roles change. Donald Zurbay now becomes chief financial officer and vice president, finance. He replaces John Heinmiler, who is taking on the task of executive vice president as he supervises the centralization of the HR, IT, legal and business development functions. Rachel Ellingson has been named vice president of corporate relations while Angela Craig will assume additional responsibilities as vice president of global human resources.
A Deep-dive Into Specialty Pharma
A specialty drug is a class of prescription medications used to treat complex, chronic or rare medical conditions. Although this classification was originally intended to define the treatment of rare, also termed “orphan” diseases, affecting fewer than 200,000 people in the US, more recently, specialty drugs have emerged as the cornerstone of treatment for chronic and complex diseases such as cancer, autoimmune conditions, diabetes, hepatitis C, and HIV/AIDS.
A newly created role of vice president, global regulatory will be fulfilled by Kathleen Chester.
