A California tech company is now cutting nearly 100 jobs after revising its sales forecast this year, according to a WARN notice.
Penumbra is set to lay off a total of 71 employees from its Immersive Healthcare division, as indicated in a Worker Adjustment and Retraining Notification (WARN) obtained by MedTech Dive.
This division, which includes virtual reality products for rehabilitation and mindfulness, was acquired by Penumbra in 2021.
In a WARN letter dated August 20, the company announced it would “permanently discontinue” this segment due to “changing business needs.”
The layoffs will commence on November 1 at Penumbra’s headquarters in Alameda, California.
The company did not provide further comments at the time of publication.
CEO Adam Elsesser mentioned in July that Penumbra was exploring “alternative avenues” for the Immersive Healthcare business.
He emphasized that while there is confidence in the long-term potential of the platform, the company’s immediate focus must shift to maximizing impact in its interventional business.
In the second quarter, Penumbra reported a $110.3 million impairment charge associated with the Immersive Healthcare segment.
The company had acquired Sixense Enterprises in 2021, having previously collaborated with them on healthcare applications for virtual reality, valuing the acquisition at $170 million.
CFO Maggie Yuen stated during an earnings call that the company anticipates reducing ongoing operating expenses by over $20 million and achieving additional savings in the next year as part of this strategic shift.
These changes are expected to positively affect Penumbra’s operating margin by 2025.
Additionally, Penumbra revised its sales forecast for 2024 downward by $60 million, projecting a range of $1.18 billion to $1.2 billion.
This adjustment is attributed to decreased business in China, delays in product launches in Europe, the discontinuation of the Immersive Healthcare segment, and revised expectations for U.S. thrombectomy growth.
The layoffs occur amid broader challenges faced by digital health technologies in the medtech sector.
Other companies, like OssoVR and AppliedVR, have also implemented layoffs recently.
In contrast, Augmedics, which focuses on augmented reality for spine surgery, acquired assets from the bankrupt company Surgalign and raised $82.5 million in funding last year.
You can search for layoffs in your state here, or follow our layoff news for updates.
Also Read: Cisco Now Profits Billions And Makes Thousands of Unexpected Layoffs
Layoff and Unemployment Report
Applications for unemployment benefits now surge to new highs, a sign that the white-hot labor market is starting to cool off.
First-time applications for unemployment benefits rose last week to 231,000, the highest level since August, per CNN.
Thursday’s data also showed that the number of continuing claims, or applications from people who have filed for unemployment for at least one week, was 1.78 million.
That’s an increase of 17,000 from the prior week, according to the Bureau of Labor Statistics.
The latest numbers come less than a week after the monthly jobs report showed the US economy added just 175,000 positions in April, less than economists expected and a steep drop-off from prior months.
US employers have now added an average of 245,500 jobs per month, versus 2023’s 251,000-per-month average.
Still, hiring remains strong.
Although the unemployment rate ticked up to 3.9%, it as seen the 27th consecutive month that the jobless rate has held under 4%, matching a streak last seen in the late 1960s.
Weekly jobless claims data tends to be volatile but, while one week’s worth of data “does not a trend make,” said Chris Rupkey, chief economist at Fwdbonds.
“We can no longer be sure that calm seas lie ahead for the US economy if today’s weekly jobless claims are any indication.”
“Company layoffs are picking up, hinting at caution on the part of companies as they weigh the outlook for the second half of the year,” he wrote in a note Thursday.
The Federal Reserve has been battling inflation by raising its key lending rate in the hopes of slowing the economy.
While the labor market has so far resisted those efforts, remaining white hot for the past 18 months despite 11 rate hikes from the central bank, Fed Chair Jerome Powell said last week that demand has “cooled from its extremely high level of a couple of years ago.”
Ian Shepherdson at Pantheon Economics said in a note earlier this quarter: “We’d need to see at least a month of elevated readings to convince us that the trend really has turned.”
For more news and updates like this, join the newsletter or opt-in for push notifications.
Also Read: Retirees Will Now Receive More Money For Social Security
Market News Published Daily 📰
Don’t forget to opt-in for push notifications so you don’t miss a single article!
Be sure to share this article with your community.
Also, thank you to all of our site sponsors.
This year we’ve been able to increase push notifications slots making it more convenient than ever for new readers to receive their daily market news and updates.
Our readers can now donate $3 per month to support independent journalism.
For daily news and updates on your favorite stories, opt-in for push notifications.
Follow Frank Nez on X (Twitter), Instagram, or Facebook.
Support Independent Journalism ✍🏻
Support independent journalism for just $3 per month!
Your contributions help power Franknez.com as the cost of widgets and online tools continue to rise.
Thank you for your support!
Recommended For You ✨
About The Author
Leave your thoughts below.
For more news and updates like this, join the newsletter or opt-in for push notifications.