Medtronic begins global layoffs, following through on plans to cut costs this year

Medtronic plans to lay off some of its nearly 100,000 employees globally, following through on plans for major cost-cutting announced in February.

The medical device company, which has operational headquarters in Fridley, did not disclose the exact number of jobs it will cut. In an email to employees Tuesday morning, Medtronic CEO Geoff Martha said "the impact will vary by team, region and country."

Medtronic spokeswoman Erika Winkels added the company began notifying employees Tuesday, and that will continue "into the coming weeks and months."

At the close of its last fiscal year in April 2022, Medtronic had more than 95,000 employees globally. Of that number, 44% of staffers worked out of the U.S. or Puerto Rico. Approximately 11,100 employees work in Minnesota.

"These decisions are never easy, and we're taking great care to treat all impacted employees with dignity and respect," Winkels said. "Medtronic will follow fair, consistent processes and provide comprehensive transitional resources to impacted employees during this time."

In February, on the company's quarterly earnings conference, Martha said the company was undertaking "significant cost reductions." At the time, the company did not provide any specifics about where the company would make cuts and did not disclose any financial targets for savings.

Martha's Tuesday email said the company had already "limited travel, slowed hiring and offered a U.S. voluntary early retirement program" to trim costs. It also cited macroeconomic and supply-chain issues as factors that have hurt its profitability and revenue growth.

"It's important that we look across our full cost structure and reduce spending everywhere that we can," Medtronic CFO Karen Parkhill said in February.

In a research note on the company's third-quarter financial results, J.P. Morgan analyst Robbie Marcus said Medtronic has not provided "proof that aggressive expense control won't impair sales growth."

Marcus said Medtronic's recent overall financial results have been "inconsistent."

Before Tuesday's announcement, the state of California received notice on April 7 that Medtronic was laying off 59 people at a facility in Sunnyvale, Calif. Medtronic also began offering early retirement packages to select employees. Winkels said back in March those retirements must occur before the end of this fiscal year, which is April 28.

Winkels declined to say how many employees Medtronic offered early retirement or how many accepted those packages.

Industry publication MassDevice has tracked more than 18,000 med-tech layoffs since mid-2022. Medtronic competitors Johnson & Johnson, MedTech and Philips International have made significant job cuts.

Chris Gustanski, CEO of Maple Grove-based Due North Executive Search, said demand in Minnesota remains strong for med-tech workers and the industry is still the "most viable industry in the state."

Medtronic is also reducing its overall headcount through spinoffs. Former employees of Medtronic's Renal Care Solutions business now work for the newly created Mozarc Medical, a joint venture with DaVita Inc. Medtronic did not indicate how many staffers made the move. Mozarc has approximately 1,700 employees.

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