Medtronic Surgical Robots (Mazor Robotics), layoffs in Israel

Medtronic Surgical Robots (Mazor Robotics), layoffs in Israel

Medical device giant Medtronic will lay off 35 people in Israel, or about 3% of the Israeli workforce (about 1,200 employees). Most of the layoffs in Israel will come from Mazor Robotics, which Medtronic acquired to develop robotic navigation systems for spinal surgery.

1. Medtronic's recent layoffs

Medtronic employs about 95,000 people worldwide and has a market capitalization of $110 billion. Medtronic, which opened its Israel office in 1974, has spent about $4 billion acquiring Israeli companies.

The move is not related to current activities in Israel, but is part of Medtronic's ongoing global restructuring plan. Most of the layoffs in Israel will come from Mazor Robotics, which Medtronic acquired for $1.6 billion in 2018, its largest acquisition in Israel. Mazor develops robotic navigation systems for spinal surgery.

On April 30, Medtronic plans to cut 44 jobs in Carlsbad, California, according to a mass layoff notice filed with the state. Medtronic told the California Employment Development Department that the permanent layoffs will begin on or about May 19 at 2101 Faraday Street. FDA records show the address is Nellcor Puritan Bennett Corp, a respiratory monitoring and ventilator brand Medtronic acquired when it acquired Covidien. One of the factories.

In 2022, Medtronic had said it would divest the Medical surgical portfolio of patient monitoring and respiratory intervention (PMRI), but no buyer emerged. Earlier this year, Medtronic announced plans to exit the ventilator market.

Bob White, executive vice president and president of Medtronic's Medical and surgical product portfolio, and Ariel Mactavish, president of respiratory intervention, left the company. On February 20, 2024, when Medtronic announced its financial results for the third quarter of fiscal year 2024 ending January 26, it announced that the remaining portion of the PMRI business would be renamed the "Acute Care and Monitoring (ACM)" segment.

Earlier this year, Medtronic Chairman and CEO Geoff Martha said at the JP Morgan Healthcare Conference that Medtronic plans to close more than five manufacturing sites and six distribution centers as part of a restructuring effort to improve the company's profit margins, consolidating the original eight distribution centers into two super distribution centers. And stopped doing business with nearly 200 suppliers.

2. Medtronic began restructuring last year

In fact, Medtronic has introduced a number of policies to cut costs in 2023.

In April 2023, Medtronic said in an email to employees that the company was struggling with higher operating costs and was moving forward with layoffs in its international operations. In the email, CEO Geoff Martha did not disclose the specific number of layoffs, but he said that the layoffs will occur in the coming months, and the specific list of layoffs will be based on team, country and regional factors.

The move comes as Medtronic said it had "significantly reduced expenses" in the final quarter of its fiscal year, which ends April 28, 2023.

In a statement, Medtronic said: "These decisions are never easy and we treat all affected employees with great care. Medtronic will follow a fair and consistent process and provide affected employees with full transition resources during this time."

In addition, in March 2023, Medtronic had introduced voluntary early retirement incentives in order to complete a significant cost reduction program by the end of the fourth quarter. In public statements, Medtronic said the Voluntary Early Retirement program, or VERP, is a "limited opportunity to retire early and enjoy more benefits," as well as a way for the company to avoid layoffs. It can also reduce unemployment, severance and litigation costs rather than mass layoffs.

In response to Medtronic's layoffs plan, an industry analyst said: "In fact, with the continuous development of the medical industry and increased competition, layoffs have become a common phenomenon in the medical device industry." In the process of enterprise development, through layoffs, mergers, split production lines and other ways to optimize the corporate structure, its essence is to better develop for the enterprise. It is not subjective to say that downsizing or selling a business is bad development. Consistency is not the yardstick for a healthy business."

3. Pioneer of Mazor spinal navigation robot

Mazor is a global pioneer of spinal navigation robots and has gone through three technology iterations.

In December 2018, Medtronic acquired Mazor Robotics for $1.64 billion and officially entered the surgical robot industry. Mazor Robotics is an Israeli medical device company and the world's leading manufacturer of robotic guidance systems for spinal surgery. Mazor Robotics was founded in 2001 by Prof. Moshe Shoham and Eli Zehavi in the Robotics Laboratory of the Technion School of Mechanical Engineering.

Moshe Shoham, known as the godfather of surgical robots, is a member of the US National Academy of Engineering. Invented Mazor Robotics Renaissance™, the world's first commercial mechanical guidance system for spinal surgery. He has successively founded several of the top Robotics companies in the Medical field, including Microbot Medical (disruptive micro-vascular surgical robot), Tamar Robtics (micro-neurosurgical robot), ForSight Robotics (micro-ocular surgical robot), Each of the latest product results developed by the company has attracted the attention of the world because of its subversion.

In 2004, Spine Assit, the first-generation Mazor spine robot, received CE and FDA certification and was the first to perform preoperative planning through CT imaging. In 2011, the second generation of products Renaissance was born, which can realize 2D and 3D navigation during surgery; In 2016, the third-generation Mazor X was introduced.

From the first generation of Mazor spinal robots developed by Moshe Shoham to the present, the Mazor family of products has more than 20 years of clinical application experience, accumulating a large amount of clinical data, laying the foundation for continuous optimization of navigation technology.

Medtronic MazorX spinal navigation robot

The MAZOR X system is equipped with Medtronic's leading intraoperative navigation technology to enable fully visualized robotic surgery. Dual system integration not only greatly improves surgical efficiency, but also truly enables MAZOR to cover the entire spine surgery.

Previously, Medtronic released 2023 fiscal year data showed that the company's 2023 fiscal year revenue of $31.227 billion, down 1.4%.

After a slight decline in fiscal 2023, Medtronic ushered in a year of transformation, not only a series of big moves to divest, but also announced layoffs and cost reduction plans. Entering the fiscal year 2024, Medtronic's latest financial data shows that the company achieved revenue of about $8 billion (about 56.8 billion yuan) in the fiscal year 2024 (FY24) Q2 as of October 27, 2023, an increase of 5.3%. So, driven by "restoring profitability as a top priority," what developments will Medtronic usher in in 2024? Equipment home will continue to pay attention.