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What a DBag! Layoff 1,200...hire 1,000 in China (Boston Scientific)




Boston Scientific to lay off 1,200-plus
Company mum on effect in Mass.
Despite some setbacks and the resignation of CEO J. Raymond Elliott, quarterly profit was better than expected.

By Robert Weisman
Globe Staff / July 29, 2011
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E-mail|Print|Reprints|Comments (49)Text size – + Boston Scientific Corp. said yesterday that it plans to eliminate 1,200 to 1,400 jobs worldwide during the next 2 1/2 years to free money for new investments, the Natick medical device maker’s second major round of cuts since last year.

These local companies have recently laid off employees. The company would not say how many jobs will be lost in Massachusetts, where fewer than 2,000 of its 25,000 employees are based. In February 2010, Boston Scientific said it would pare 1,300 jobs worldwide, but similarly did not say where.

Yesterday’s move, a day after Boston Scientific disclosed it was investing $150 million and hiring 1,000 people in China, raised fears that the company will gradually shift more work to foreign sites with less government oversight and lower costs than the United States.“I’ve asked for information on where they are cutting jobs,’’ said state Senator James B. Eldridge, an Acton Democrat. He has proposed so-called clawback legislation that would allow the state to recover money from businesses that receive tax breaks here - including Boston Scientific - and then reduce their workforces.

“My sense is, sadly, that like many other American companies, they are shedding jobs in Massachusetts and adding jobs overseas,’’ Eldridge said. “And this is a company making greater profits, so it’s even more outrageous.’’

Boston Scientific has been under intense US regulatory scrutiny in recent years because of defects in a pair of its best-selling cardiac products: tiny mesh tubes known as stents that are used to keep cleared arteries open and implantable defibrillators that send electric shocks to restore heart rhythm.

And earlier this month, the Food and Drug Administration said it was investigating whether plastic mesh made by Boston Scientific and other companies should be banned for a procedure to treat a gynecological condition called pelvic organ prolapse.

Despite those setbacks - and the surprise departure of chief executive J. Raymond Elliott, scheduled for the end of this year - the company yesterday posted stronger-than-expected second-quarter earnings of $146 million, or 10 cents a share, up from $98 million, or 6 cents a share, in the corresponding period last year.

Shares of Boston Scientific climbed 8.5 percent yesterday to $7.28, a gain of 57 cents.

Boston Scientific officials said the latest job cuts, which will involve layoffs and leaving open positions vacant, are part of a broader effort to save between $225 million and $275 million annually. That will enable the company to invest in new products and geographic markets as growth flattens in the United States and other Western countries.

Sales edged up to $1.9 billion from $1.8 billion in the three months ended June 30, but much of that growth came because Boston Scientific sold devices in countries with currencies stronger than the dollar.