Boston Scientific announced it would lay off 2,300 employees, about 8% of its workforce, as well as cut 2008 expenses by $500 million. The divulgence comes just before the company is to report third-quarter earnings.
The massive layoffs will begin as early as this month, continuing until the end of 2008. BSX hasn't yet expressed which divisions the cutbacks would effect.
In line with cutting costs, BSX has also revealed it will put various units up for sale, most notably its cardiac surgery/vascular surgery business, as well as its fluid management/oncology venous access unit.
Since its $27-billion acquisition of Guidant Corp. last year, the Massachusetts-based medical-device maker stands to be approximately $8.1 billion in the red. As if pouring salt in the company's wounds, sales of its defibrillator have plummeted 20% in 2 years due to recalls (surprise, surprise), and stent sales are down 27% from a year ago due to poor medical studies.
BSX has forecaste third-quarter earnings to come in around 3 cents to 8 cents a share, falling in line with analysts' expectations. The company will report earnings before the open of trading tomorrow.
The stock took a hard hit in August, hitting a 52-week low of $12.11. It steadily rallied back to meet resistance at the 15 level, but has since declined nearly a point below its 10-day and 20-day moving averages. Currently, BSX is trading at $13.93, down nearly 1.5%.