Medtronic is undertaking a restructuring that will cut costs by $450 million to $475 million annually and include an unspecified number of job cuts.
The medical device giant — based in Ireland but mainly run from Fridley — is adopting a “new operating model [that] will simplify Medtronic’s organizational structure and accelerate decisionmaking and execution,” according to a filing Tuesday with the U.S. Securities and Exchange Commission (SEC).
The annualized cost savings of up to $475 million will be achieved by Medtronic’s fiscal-year 2023.
Due to the restructuring, the company will also incur pretax costs — including severance — of $400 million to $500 million, the majority to be recognized by the end of its 2022 fiscal year.
In response to a query from the Star Tribune, Medtronic acknowledged that the restructuring would entail job cuts, and that affected employees are being notified. The company declined to release any job-cut numbers or locations.
Medtronic employs more than 90,000 people worldwide and nearly 11,000 in Minnesota, mostly in the Twin Cities.
Medtronic has four business groups: diabetes; cardiac and vascular; restorative therapies; and minimally invasive therapies. They are being shuffled to create “operating units” organized around specific therapy areas, the SEC filing said.
Leaders of the new operating units will have full responsibility and accountability for their individual businesses and markets.
With the creation of the new units, Medtronic is consolidating operations at the corporate level — including the company’s global manufacturing, supply chain and facilities, the filing said.
Medtronic said it will discuss its plans further at an upcoming Investor Day being held virtually on Oct. 14.
The company will begin transitioning to the new organizational model during its third quarter, which begins in late October.
Medtronic’s stock closed Wednesday at $108.78, up 1.25%.