Dive Brief:
- Johnson & Johnson is laying off around 350 people at its Auris Health and Verb Surgical robotic surgery units in California.
- Auris accounts for most of the cuts, with J&J laying off 292 of its employees across two sites, but 47 workers at Verb and 13 people from four other businesses are also heading to the exit.
- J&J disclosed the layoffs in a regulatory filing days before its CFO, Joe Wolk, said there is “a sense of urgency” at the company as it works to come from behind in the robotic surgery market.
Dive Insight:
J&J made a major push into robotic surgery in 2019, when it paid $3.4 billion upfront for Auris and took full control of the Verb joint venture it set up with Alphabet’s Verily a few years earlier. Since then, the company has been beset by delays, first in 2020 when it dropped plans to bring a Verb-Auris robot to the U.S. via the 510(k) pathway, and then in 2021 when it pushed back an anticipated launch by two years.
With work to bring the soft tissue robot Ottava to market ongoing, J&J has decided to make layoffs at its robotic surgery business. The layoffs affect two sites in California. In addition to the cuts at Auris and Verb, J&J is laying off a small number of employees of CSATS, Ethicon Endo-Surgery, Johnson & Johnson Services and Medical Device Business Services who work at the two sites.
CSATS, which J&J bought in 2018, provides a video-based surgery assessment platform. Ethicon, as part of J&J, formed Verb with Verily in 2015. J&J will complete the permanent layoffs by the end of April.
J&J’s CFO discussed the robotics operation, without mentioning the layoffs, at the Cowen Health Care Conference, an investor event, earlier this week. While noting the progress of the bronchoscopy system Monarch and the knee platform Velys, Wolk identified areas to improve with Ottava.
“We have to get better with the soft tissue robot Ottava,” Wolk said. “We're very excited.”
“It's important to remember that while we're behind and [while] we certainly want to do better [and] we have a sense of urgency, we realize it's very early in this game,” Wolk added.
He noted that now, only about 5% of surgery globally is performed with a robotic platform.
“We want to make sure it's a digital ecosystem where we're getting information about the patient in advance of the procedure, as well as after the procedure,” he added. “That's really what the team is trying to innovate and come up with, a differentiated product.”
Updates to add additional comment from CFO.
