Skaneateles Falls Welch Allyn has announced it will reduce 10 percent of its workforce – including numerous positions in Skaneateles – and begin a company-wide restructuring program during the next three years. The decision is a result of an upcoming medical device tax in the new U.S. healthcare law and a changing global healthcare environment, according to a press release from the company.
To effect the changes, the company will establish three distinct New Product Development and Technology Centers in Skaneateles Falls; Beaverton, Ore.; and Singapore. It will also create a Global Finance Shared Service Center in Tijuana, Mexico and consolidate its North American manufacturing and related support functions at its largest facilities in Skaneateles Falls and Tijuana, Mexico.
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.
Welch Allyn said in a press release these actions will “proactively prepare the company to address the new onerous 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 Affordable Care Act, often dubbed Obamacare, contains a 2.3 percent excise tax on the sale or lease of all medical devices made in the U.S., which will cost Welch Allyn millions of dollars every year.
“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 Welch Allyn President and CEO, Steve Meyer.
The company’s planned 10 percent workforce reduction during the next three years will be accomplished through a combination of voluntary and involuntary separations, the company said. Welch Allyn has 2,750 employees worldwide, including 1,300 in Skaneateles.