Boston Scientific (BSX) Job Cuts on the Way

August 29, 2012 3:18 PM EDT
Boston Scientific (NYSE: BSX) is preparing to make another round of job cuts, according to reports. Amid management changes, the company has had a difficult time maintaining revenue growth this year, and despite improvements in margins the stock has underperformed.

Boston Scientific will also separate its cardiac rhythm management (CRM) unit, which makes heart pacemakers and defibrillators, from its interventional cardiology business, which makes stents. Total CRM sales totaled $488 million in the second quarter and were down 10 percent. The performance reflected declines and weaker results in both ICDs and pacemakers. Performance in this area is expected to be lackluster for most of 2012, say analysts. Second quarter sales of coronary stents declined by 21 from the prior year, totaled only $340 million from 428 in the previous year.

The job cuts confirm an announcement in a letter to employees and are related to manufacturing adjustments and not related to the separation of its CRM unit. The exact number of cuts is unknown at this time, but a formal announcement is expected within the next few months.

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