Layoff announcements rattled the medtech industry last week, tempering the optimism on display just a month ago when device makers were forecasting improved business conditions and rising procedure volumes.

While layoffs in medtech have been modest compared to the number of workers who have lost jobs across the broader tech industry or in biotech, the latest workforce reductions show companies in the sector are still wrestling with the pandemic’s fallout.

“Across all industries, businesses are trying to right size their cost structures for the current post-COVID environment and U.S. economy,” Stifel analyst Rick Wise said in an emailed note. “Also, we are seeing individual companies like Abbott, for instance, reduce their point-of-care testing workforce in response to the continuing/expected decline in testing levels.

Others like Baxter are restructuring their workforce as they work to transform both their portfolio mix and better adapt their operations to the ‘new’ economic/macro realities of supply chain, inflation, etc.”

Baxter International said on Thursday it would cut less than 5% of its global workforce, or about 3,000 jobs, as it expands a restructuring program aimed at producing $300 million in cost savings in 2023. The maker of infusion pumps, dialysis therapies and other medical devices said supply constraints created order backlogs that hampered sales.

Abbott is laying off hundreds of temporary workers at a facility in Westbrook, Maine, that assembled rapid COVID-19 tests during the pandemic, according to local media reports. A spokesperson for Abbott, Scott Stoffel, wrote in an email that as COVID becomes a more endemic, seasonal respiratory virus, testing will decline significantly, and the company is “adjusting” its temporary workforce to “align with market conditions.”

“We no longer need the vast majority of our temporary workforce in Westbrook. There will be no changes at this time to our permanent workforce and the site will continue producing COVID tests,” he added. Stoffel said he would not detail the exact number of people being laid off.

Also last week, Thermo Fisher Scientific indicated in a Worker Adjustment and Retraining Notification that it eliminated 230 positions in San Diego County due to a drop in demand for COVID testing products and other economic and business conditions. The move comes after the company cut 105 positions late last year.

Quest Diagnostics, citing declining COVID-19 testing volumes, said earlier this month it would reduce its headcount by about 1.5%, saving $100 million this year.

Surmodics, which is working with Abbott to develop a drug-coated balloon to treat peripheral arterial disease, said it would lay off 13% of its workforce, or about 60 employees, following a regulatory setback. Surgical robot developer Titan Medical also announced it let go of 48 employees after failing to find a buyer for its assets.

KeyBanc analyst Matthew Mishan said Baxter and other companies likely over-hired to address increased demand as well as absenteeism during the pandemic. In the case of Baxter, the company is also simplifying its reporting structure, which probably created some redundancies, Mishan said in an email.

Many of the layoffs in medtech reflect company-specific challenges, said Morningstar analyst Debbie Wang.

For example, Philips in late January said it would eliminate another 6,000 jobs in a second round of layoffs driven by ongoing product recalls of its CPAP machines, Wang noted. Baxter, she said, is likely “a bit bloated after its acquisition of Hillrom, so we’re not surprised the firm is laying off some people.” The company's supply chain and inventory issues also could take several quarters to iron out, she said.

“The rest of the medtech field seems to be divided into COVID haves and have-nots. What COVID gave to diagnostics companies, COVID taketh away now that the virus is endemic,” Wang said in an email. “We’re keeping our eyes on those in vitro diagnostics firms that bulked up during the pandemic, but might not need so many people now that COVID demand is dropping.”

As COVID-19 recedes, companies such as Zimmer Biomet, Stryker, Medtronic and Boston Scientific that have been seeing procedure volumes return probably are grateful that they didn’t lay off much of their sales forces during the pandemic, Wang said.

Clarification: This article has been updated to reflect that Baxter is laying off less than 5% of its global workforce.