Boston Scientific said Thursday that it’s cutting wages for many of its roughly 36,000 global employees by 20 percent for the next 90 days because the postponement of elective surgeries during the coronavirus pandemic has decreased revenue.
The Marlborough-based medical device maker also plans to make deeper cuts to the base salaries of its chief executive, Mike Mahoney, and those of its board of directors and executive committee. Boston Scientific predicted that the impact of COVID-19 will be worse in the second quarter.
Starting in a couple of weeks, Boston Scientific plans to put most of its full-time US workers who aren’t involved in sales or manufacturing on a four-day work week for 90 days, with a corresponding reduction in base salary. Hours for part-time employees will be maintained at a level to preserve benefits.
Boston Scientific has about 17,000 workers in the United States, including nearly 3,000 in Massachusetts. A spokeswoman declined to say what will happen to Boston Scientific’s 19,000 overseas employees as part its “mitigation plans” or specify the number of workers overall whose pay will be reduced.
In a filing Monday with the Securities and Exchange Commission, the company said business was down because doctors domestically and abroad are postponing elective surgeries and procedures during the epidemic. Many of those procedures use the company’s products, from coronary stents to endoscopic devices.
“As health care systems respond to the increasing demands of managing COVID-19, emergent procedures need to be prioritized to help enable increased hospital capacity, and therefore elective procedures are being delayed," Mahoney said Thursday.
"While we expect this to negatively impact short-term performance, we continue to believe in the excellent, long-term fundamentals of our company and will continue to manage through these challenges with strategic focus and the winning spirit of our talented global team,” he said.
As a result of the downturn, Mahoney plans to forgo his base salary for up to six months, other than payments needed to retain his benefits, as of April 13, according to an SEC filing. His base salary in 2019 was almost $1.28 million. His overall compensation totaled over $15.7 million, including stock and option awards.
The chief financial officer, president of interventional cardiology, president of heart rhythm management, and executive vice president of operations are taking a 50 percent cut in base salary for up to six months, the filing said.
The company’s board of directors decided Wednesday that each director’s annual cash retainer will be halved for the year, according to the filing.
The company’s stock ended the day Thursday at $31.05, up 2.9 percent.
Dozens of Massachusetts businesses have announced layoffs and furloughs as a result of COVID-19 recently, particularly in the hospitality industry.
Boston Scientific is hardly the only medical device maker hurt by the cancellation of elective surgeries. On Tuesday, Kalamazoo, Mich.-based Stryker said in an SEC filing that the health crisis had had a “significant economic impact” but did not provide specifics.
Boston Scientific is one of the biggest companies in Massachusetts, with a market value of about $42 billion. Founded 40 years ago, it makes dozens of products used by physicians in a wide range of medical specialties, from gynecology to neurology to orthopedics.
In December, the Food and Drug Administration approved the firm’s new single-use duodenoscope, the first disposable scope to gain clearance. Called EXALT, the snake-like device is inserted into the mouth and lowered into the small intestine to diagnose and treat diseases of the pancreas and bile ducts.
It’s intended to eliminate life-threatening infections associated with non-disposable scopes, which the FDA says are hard to sterilize. Last year, a Boston Scientific executive who oversees endoscopy said the device and others being developed by rival companies had the potential to generate $1 billion in sales.
In recent years, Boston Scientific has drawn praise for its efforts to diversify its workforce and to post its progress on its website. Last year, the company reported that more than 51 percent of new hires globally were women, and more than 42 percent of new hires in the United States were people of color.
The company on Thursday said that it’s collaborating with a university, businesses, and a nonprofit to bring a ventilator alternative to market and produce personal protective equipment such as face shields. Ventilators and PPE have been in short supply at hospitals during the epidemic.
Jonathan Saltzman can be reached at firstname.lastname@example.org