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Boston Scientific Approves Restructuring Plan, Expects Job Cuts

Created at 27 Jul · 10:12 PM1 source↑ Market-relevant
IN SHORT

Boston Scientific's board has approved a company-wide restructuring plan to cut costs and improve future growth, involving supply chain optimization and organizational changes. The plan is expected to result in job losses and cost between $700 million and $800 million before taxes, with an anticipated annual savings of $500 million.

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Key Numbers

$700 million - $800 millionestimated restructuring cost before taxes
$600 million - $700 millionexpected cash payout for restructuring
$500 millionexpected annual expense reduction
2029expected completion year for restructuring

Who's Involved

Boston Scientific
medical device maker implementing restructuring plan

↳ Why This Matters

The restructuring plan signals Boston Scientific's strategic shift to improve efficiency and invest in growth, potentially impacting its workforce and financial performance in the coming years.

Key facts

  • Boston Scientific's board approved a restructuring plan on July 21.
  • The plan aims to optimize the supply chain, shift production, and reorganize the company.
  • The restructuring is expected to lead to job losses.
  • The plan is estimated to cost between $700 million and $800 million before taxes.
  • The company anticipates annual savings of $500 million once the changes are fully implemented.
  • Savings will be reinvested into growth initiatives.

Boston Scientific's board has approved a comprehensive restructuring plan designed to cut costs and enhance the company's positioning for future growth. The plan, greenlit on July 21, encompasses optimizations within the supply chain, strategic shifts in production between manufacturing facilities, and changes to the company's organizational structure.

These changes are slated to commence this year and are projected to be substantially completed by the end of 2029. Boston Scientific indicated that the restructuring will result in some job reductions, although the company continues to hire in expanding sectors and reallocate resources to meet global market demands.

The financial implications of the plan are significant, with estimated pre-tax costs ranging from $700 million to $800 million, a portion of which, between $600 million and $700 million, is expected to be paid in cash. Upon full implementation, Boston Scientific anticipates a reduction in annual expenses by approximately $500 million. A substantial part of these savings is earmarked for reinvestment in growth initiatives.

The company is scheduled to report its second-quarter financial results on July 29, with investors likely to focus on the performance of its heart device portfolio.

Frequently asked questions

The plan aims to cut costs and better position the company for future growth through supply chain optimization, production shifts, and organizational changes.

The plan is estimated to cost between $700 million and $800 million before taxes.

Boston Scientific expects to reduce its annual expenses by about $500 million once the changes are fully in place, with savings reinvested into growth initiatives.

The changes are expected to begin this year and be largely finished by the end of 2029.

What Happens Next

01Boston Scientific to post second-quarter results on July 29.

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Cadence

How It Developed

Boston Scientific's board approved a company-wide restructuring plan on July 21.
The plan involves supply chain optimization, production shifts, and organizational changes.
The restructuring is expected to begin this year and conclude by the end of 2029.
The company anticipates job losses as part of the plan.
The restructuring is estimated to cost between $700 million and $800 million before taxes.
Boston Scientific expects to reduce annual expenses by approximately $500 million once fully implemented.
Savings from the plan will be reinvested into growth initiatives.

Sources

T1
Boston Scientific unveils new restructuring plan, expects job cutsReuters

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