A medical company now announces unexpected layoffs in Minnesota, an effort to focus on reducing service centers and manufacturing sites.
ICU Medical is preparing to close a service and distribution facility in Oakdale, Minnesota, and lay off all 83 employees at the location, according to a Worker Adjustment and Retraining Notification (WARN) letter.
The infusion pump maker has prioritized cost reduction efforts including the consolidation of service centers and manufacturing sites since acquiring Smiths Medical from London-based Smiths Group in 2022.
San Clemente, California-based ICU decided to permanently shutter the Oakdale site after a thorough analysis of its U.S. service operations, the company said in the July 16 WARN letter filed in Minnesota.
ICU’s planned facility closure is the latest in a series of medtech industry workforce reductions that have hit the sector hard over the past two years.
A recent MedTech Dive analysis of WARN filings in state databases found more than 14,000 employees in the sector have lost their jobs in restructurings since the start of 2023.
Terminations at the Oakdale operation are expected to begin on Sept. 16 and continue through Dec. 31, according to ICU’s WARN notice, which the Minnesota Department of Employment and Economic Development provided to MedTech Dive.
In January 2022, ICU acquired Smiths Medical for $2.35 billion, adding syringe and ambulatory infusion, vascular access, and vital care devices to its portfolio.
However, in 2023, the company faced challenges integrating the Smiths Medical acquisition and saw its revenue decline, leading to a net loss of $29.7 million.
To stabilize operations and position the combined company for growth, ICU is taking several measures.
These include eliminating duplicative pump service centers and other sites globally, and plans to cut its number of manufacturing sites in half, from 20 sites in 2022 to just 10 facilities by 2026.
The Minnesota WARN notice indicated that the job terminations at the Oakdale service facility will mostly affect technician roles, but will also include inspectors, supervisors, engineers, and other positions.
These employees were not represented by a union.
Additionally, this spring, Smiths Medical recalled more than 2,900 emergency ventilators in the U.S. after receiving reports of a problem linked to eight serious injuries.
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Other Economy News Today
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% last month, it’s 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 Thursday: “We’d need to see at least a month of elevated readings to convince us that the trend really has turned.”
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Also Read: A Giant Company Now Announces Unexpected Layoffs in Virginia
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