Hospital equipment maker Hill-Rom(Batesville,IN)plans on cutting approximately 350 workers,or 5%of its global workforce,to save roughly$30 million annually.The restructuring efforts include a downsizing of the firm's European manufacturing capacity and the closure of one facility there.In addition,Hill-Rom will streamline operations in both the continent and the United States.
The news comes after the company announced its negative financial results for the quarter ending on December 31,2013.The firm's revenue of$393 million represented an 8%drop compared to the same quarter in the previous year.On a constant currency basis,the decrease is 9%.The company faced significant difficulty in the domestic sector.Its revenue from U.S.sales fell 12%to$206 million.
The decrease was a result of"inherent volatility"and"challenges in[Hill-Rom's]capital equipment markets,"according to John Greisch,the company's president and CEO.Greisch also points out that hospitals are under pressure to contain costs and curb spending on hospital equipment.Nevertheless,the company's financial performance has missed its own expectations.
"We are clearly disappointed by our weaker than expected results.However,we remain committed to driving long-term margin improvement through aggressive management of our operating cost structure,as demonstrated by the restructuring actions we announced today,"Greisch added.
The company's high-margin medical-surgical product line has faced slow sales over the past two quarters,missing the firm's expectations by a wide margin.Considering this news,the company has decided to lower its guidance for revenue and earnings expectations.
The restructuring follows a series of headcount reductions that have shrunk the firm's global workforce by roughly 1000 or 15%over the past four years.
