Welch Allyn restructures business, cuts 10% of workforce

Wednesday, September 12, 2012 10:26 AM

Welch Allyn, a global provider of frontline medical products and solutions based in Skaneateles Falls, N.Y., will reshape its business and realign resources over the next three years.

The company will establish three distinct new product development and technology centers in Skaneateles Falls, N.Y.; Beaverton, Ore.; and Singapore. It will also create a global finance shared service center in Tijuana and consolidate its North American manufacturing and related support functions at its largest facilities in Skaneateles Falls and Tijuana.

Welch Allyn said these actions will proactively prepare the company to address the new U.S. medical device tax scheduled to begin in 2013 as mandated in the Affordable Care Act, as well as other significant changes driven by healthcare reform and market dynamics. The company will also perform a 90-day evaluation of its European operations to determine the optimal deployment of the business in that important market, and reorganize its Latin America business to be more competitive in the region.

"We firmly believe this restructuring program is the right thing to do for the long-term success of the business. However, we also fully recognize the hardship it will cause some of our colleagues in the short term," said Steve Meyer, president and CEO of Welch Allyn.

The company expects to reduce an estimated 10% of its current workforce over the next three years through the restructuring. This will be accomplished via a combination of voluntary and involuntary separations. Welch Allyn currently has a total of 2,750 employees globally. In addition to offering every affected employee a separation package, including outplacement assistance, Welch Allyn will provide a continuing education assistance benefit for employees affected by the involuntary reductions.

"Welch Allyn recognizes the value of an educated workforce to our community and our economy," said Meyer. "The company will reimburse up to $4,000 of the cost of education for the successful completion of coursework through an accredited institution of higher learning and/or for the successful achievement of a professional certification designation offered by a recognized organization. We will make this benefit available to these employees for up to 12 months post-departure."

Meyer also said Welch Allyn's global headquarters in Skaneateles Falls will continue its evolution into a high technology center, capitalizing on demand for the company's digitally-enabled patient vital signs monitoring systems and diagnostic cardiology product offerings, in addition to its traditional core opto-electronic product categories. In doing so, the facility will absorb the patient monitoring, systems and low acuity vital signs product manufacturing operations from its Beaverton facility, while the company's Tijuana operations will absorb additional thermometer probe cover, lamp and some blood pressure cuff manufacturing operations from Skaneateles Falls.

"Our plan is well thought out and tied to the rapidly changing healthcare market, and in keeping with our history of making sure we treat our employees fairly and with the highest level of respect. We are confident we will emerge from this restructuring stronger than ever,” said Meyer.

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