Dive Brief:
- Medtronic plans to transfer or offer “transitional support” to employees who may be affected by its decision to exit the ventilator market and reorganize the remaining respiratory and patient monitoring businesses into a new unit, a company spokesperson said in an email to MedTech Dive.
- The company said the decision is the “right strategic move for our business” but did not specify how many workers it will impact. “The decision to wind down the ventilator business is not made lightly and there is a great deal of consideration for our employees and how they are affected,” the spokesperson wrote in the statement. “While there may be impacts, we will work to redeploy employees currently in the ventilator business to roles in other parts of Medtronic where possible or offer comprehensive transitional support.”
- At the time of publication, Medtronic did not respond to MedTech Dive’s additional request for comment on how many people could be transferred or offered transitional support.
Dive Insight:
Last week, Medtronic said it would shut down its ventilator product lines and reorganize the remaining patient monitoring and respiratory interventions businesses into a new unit, called Acute Care and Monitoring. The decision reverses a planned spin-off of the businesses announced in October 2022.
CEO Geoff Martha said on an earnings call that the company decided against spinning off or selling the units as the ventilator business “became increasingly unprofitable” and the market favored lower acuity ventilators, which is not Medtronic’s expertise. Martha also explained the dynamics of the patient monitoring market improved for Medtronic.
“Our improved competitive positioning — in our monitoring business, in particular — changed over the last year. As we are working on the process, we continue to run the business, and it performed well. And the competitive dynamics versus our main competitor, Masimo, changed significantly for the positive for us,” he said. “We believe that we can ensure that change is durable with the increased investment.”
The savings from exiting the ventilator business will help increase investment in the new unit.
While employees in the ventilator unit may be affected by the strategic shift, a spokesperson wrote that a manufacturing site in Galway, Ireland, which currently manufactures ventilators, will continue to be an important facility for Medtronic.
“Since 2020, our product lines at the site have diversified and we will continue to look for new investment opportunities for this location,” the spokesperson wrote. “Medtronic uses an established process designed to ensure we have the talent and skills needed to meet the current and future needs of our businesses to ensure we will be staffed accordingly.”
Medtronic also noted the “role our Irish employees played in driving ventilator innovation and responding to the global needs for ventilators during the COVID-19 pandemic,” including significantly increasing production.
