Medtech giant St. Jude Medical announced a major reorganization and leadership changes on Tuesday.
The Little Canada, MN–based company says its two operating divisions will be integrated into one research and development organization, and manufacturing and supply chain operations will be combined worldwide.
This reorganization is the second in recent years. Those two operating divisions, cardiovascular and ablation technologies and implantable electronic medical systems, were formed in late 2012. The then-anticipated cost savings included the elimination of a total of 800 jobs. "We estimate that we already have generated more than $100 million in incremental cost savings as a result of our restructuring," Daniel J. Starks, chairman, president and CEO, said in a recent conference call with analysts transcribed by Seeking Alpha. As yet no further layoffs among the company's 16,000 employees worldwide have been announced as a consequence of the latest round of restructuring.
Speaking to the newly announced restructuring, Starks said, “One reason 2013 was such a successful year for us was that we streamlined our organization, improved productivity, and reduced costs through organizational changes we announced in August 2012. The changes we announced today will help us build on that success to further leverage our scale, align on our highest priorities and improve execution of our long-term growth program.”
Management changes include the promotion to chief operating officer of Michael Rousseau, previously group president. The new group president will be Eric Fain, previously president of the company’s Implantable Electronic Systems Division.
Over the next several months, Fain will lead the integration of Implantable Electronic Systems Division and the Cardiovascular and Ablation Technologies Division into one cohesive St. Jude Medical research and development organization.
The company also announced three promotions. Scott Thome is being promoted to the newly created position of vice president, global operations and supply chain; Lisa Andrade has been promoted to chief marketing officer; and Jeff Dallager has been promoted to vice president, corporate controller. St. Jude Medical also announced that Frank Callaghan, president of the cardiovascular division, has decided to retire.
St. Jude Medical has four major clinical focus areas: cardiac rhythm management, atrial fibrillation, cardiovascular, and neuromodulation. The company makes implantable cardioverter defibrillators (ICDs), cardiac resynchronization therapy (CRT) devices, pacemakers, remote monitoring systems, cardiac mapping and visualization systems, catheter-based ablation devices, vascular closure devices, structural heart products, spinal cord stimulation, peripheral nerve stimulation, and deep brain stimulation devices.
After an anticipatory run-up before the company's 2013 results announcement on January 22, St. Jude Medical's stock had faded a bit. Although fourth quarter results were said to be a bit better than analysts' expectations, full-year numbers and predictions for 2014 were found to be somewhat disappointing. As of this writing just after the closing bell on the day of the announcement, the stock was up less than 1% from the previous day's close, which amounts to a year-to-date rise of about two tenths of a percent.
