You can now read 10 articles in a month for free on BostonGlobe.com. Read as much as you want anywhere and anytime for just 99¢.

The Boston Globe

Business

Boston Scientific to cut up to 1,000 jobs

CEO says trims to have less impact in Mass.

CEO Mike Mahoney is expected to outline a new company strategy at a February investors meeting in New York.

JB Reed/Bloomberg News/file 2006

CEO Mike Mahoney is expected to outline a new company strategy at a February investors meeting in New York.

Boston Scientific Corp., the Natick medical device maker that already has eliminated more than 1,000 jobs over the past three years, said Tuesday it plans to cut another 900 to 1,000 jobs worldwide.

The company did not specify where the job cuts would take place, but new chief executive Mike Mahoney said in an interview there is likely to be “less of an impact in Massachusetts than in some other areas.” That’s because some of Boston Scientific’s fastest growing businesses, such as endoscopy and women’s health products, are based here, he said.

Continue reading below

Boston Scientific currently has about 24,000 employees, including between 2,000 and 3,000 in Massachusetts, company officials said. In November, it unveiled plans to sell a Natick office complex and move corporate headquarters and about 800 employees to the Boston Scientific campus in Marlborough. The company also operates a distribution center in Quincy.

The latest cutbacks, which are intended to shave $100 million to $115 million in operating costs by the end of 2013, were disclosed as Boston Scientific posted lower profit and sales for the last three months of 2012. The results nonetheless exceeded estimates of analysts in an increasingly sluggish global market for cardiac and other medical technology products.

Shares of Boston Scientific climbed 3.5 percent to $7.10, a 52-week high, on the New York Stock Exchange, as analysts applauded the company’s plan to streamline operations and begin focusing on faster growing products and markets.

Analysts were also encouraged by the company’s forecast of $7 billion to $8 billion in sales for 2013, with revenues accelerating in the second half of the year.

“Given that investors are focused intently on [Boston Scientific’s] ability to return to top-line growth, we view initial 2013 guidance positively,” Danielle Antalffy, medical device analyst for the Boston health care investment bank Leerink Swann, wrote in a note to investors.

Tuesday marked the third time in recent years that Boston Scientific has disclosed major jobs reductions. In February 2010, the company said it would eliminate 1,300 jobs, and in July 2011 it outlined plans to do away with 1,200 to 1,300 over 2½ years. Company officials would not say Tuesday precisely how many jobs have been cut in total.

“We’re executing on our historic cost-cutting program,” Mahoney said.

At the same time, he said, Boston Scientific has been investing in faster-growing regions and market segments. The company disclosed in 2011, for example, that it would plow $150 million into a new plant in China that planned to hire about 1,000 people. And last October, it purchased Rhythmia Medical Inc., a Burlington developer of software used in medical procedures, paying $90 million upfront and agreeing to make up to $175 million in milestone payments if Rhythmia meets regulatory, commercial, and sales targets over the next five years.

Massachusetts, which has given the company tax breaks, has not escaped the effects of Boston Scientific’s restructuring. The company eliminated 101 jobs in Marlborough and eight in Quincy in the fiscal year ended last June, according to documents filed with state officials.

Mahoney, however, said the bulk of the cuts going forward are likely going to be in weaker-growth regions such as southern Europe, and in product lines where Boston Scientific has been unable to increase market share. He is expected to outline a new Boston Scientific strategy at a February investors meeting in New York, just three months after he took over as chief executive.

“It probably goes without saying that we’re committed to Massachusetts,” Mahoney said in the interview. “We’re Boston Scientific. We need to continue to rightsize our company, but overall there will be less of an impact in Massachusetts than in some other areas.”

Boston Scientific, like other medical technology companies, has been seeking to reposition itself at a time when health care providers are focused on keeping costs down, and commercial health insurers and government payers are reimbursing generously only for devices that keep patients out of the hospital.

The company has been struggling in recent years as sales have declined in the interventional cardiology and cardiac rhythm management markets, where Boston Scientific had hoped to grow through its $28.5 billion purchase of Indiana medical device maker Guidant Corp. in 2006. Mahoney said Tuesday that he believed that demand for products in those markets, ranging from cardiac monitors to defibrillators and pacemakers, has bottomed out.

Boston Scientific’s fourth-quarter earnings tumbled 44 percent to $60 million, or 4 cents per share, including one-time accounting charges to cover the costs of the ongoing restructuring and litigation. Quarterly sales edged down 1 percent to $1.82 billion.

While he noted that Boston Scientific’s financial performance was improving, Mahoney said he wasn’t satisfied with the fourth-quarter results.

“We didn’t grow,” he said. “We want to improve the overall company performance. We want to grow the top line of the company.”

Robert Weisman can be reached at weisman@globe.com.
Loading comments...

You have reached the limit of 10 free articles in a month

Stay informed with unlimited access to Boston’s trusted news source.

  • High-quality journalism from the region’s largest newsroom
  • Convenient access across all of your devices
  • Today’s Headlines daily newsletter
  • Subscriber-only access to exclusive offers, events, contests, eBooks, and more
  • Less than 25¢ a week