SKANEATELES FALLS — Welch Allyn will eliminate 45 jobs over three years at its Skaneateles Falls headquarters as it carries out a companywide restructuring, but the location will not bear the brunt of the corporation’s planned employment cuts. The medical-device manufacturer announced on Sept. 10 that it will reduce its work force by 10 percent […]
SKANEATELES FALLS — Welch Allyn will eliminate 45 jobs over three years at its Skaneateles Falls headquarters as it carries out a companywide restructuring, but the location will not bear the brunt of the corporation’s planned employment cuts.
The medical-device manufacturer announced on Sept. 10 that it will reduce its work force by 10 percent over three years. It currently employs 2,750 people in 26 different countries.
Its 350,000-square-foot headquarters, which is located at 4341 State St. Road in Skaneateles Falls, employs more than 1,300 people. The 45 positions to be cut there will not be manufacturing jobs, according to Steve Meyer, Welch Allyn president and CEO.
“Here in Skaneateles, we don’t expect there to be a shop-floor labor impact,” he says. “There’s a pretty specific set of processes around this. There will be some [cuts] each of the next three years.”
Manufacturing employees at the company’s headquarters are still in line for some changes. Welch Allyn plans to transfer thermometer-probe cover, lamp, and some blood-pressure cuff manufacturing from Skaneateles Falls to a plant it runs in Tijuana, Mexico. It will then move patient-monitoring systems and low-acuity vital-signs manufacturing to Skaneateles Falls. Those products are currently made at the company’s Beaverton, Ore. facility.
Welch Allyn will retrain manufacturing employees in Skaneateles to work in the relocated product lines, according to Meyer. It expects to cut 160 manufacturing jobs in Beaverton, where it employs nearly 300 people, he says.
The company cited two reasons for the restructuring and job cuts: economic weakness in Europe, and a 2.3 percent federal tax on the sale price of medical devices, which is scheduled to start in 2013 as part of the U.S. health-care reform law.
“It’s a changing business climate over the last two to three years,” Meyer says. “European markets have flattened out, and in some cases business there has gotten very difficult.”
The U.S. market is shrouded in uncertainty, Meyer continues. As the nation restructures its health-care system under the health-care reform law, market demands are changing. And the device tax has a major impact on income, he adds.
“Much of our business in the U.S. is under contract,” Meyer says. “So we’re pressurized by the contract, unable to raise prices very much at all.”
Welch Allyn does not disclose revenue or other financial information. Meyer would only say that between 35 percent and 40 percent of the company’s sales take place outside of the United States.
“There is a positive impact of the international business,” he says. “We’ve made some investments there over the last several years, including opening a research-and-development center in Singapore. We’re going to bring even more focus on that going forward — the emerging market in Asia where almost two-thirds of the world’s population is located.”
The corporate restructuring will have Welch Allyn establishing three product-development and technology centers. They will be in its Skaneateles Falls headquarters, Beaverton, and Singapore.
Details about the centers’ roles have yet to be finalized, Meyer says. But the Skaneateles Falls center will likely emphasize mechanical and electrical engineering. Beaverton will probably focus on wireless technology and software. The company’s Singapore location, which currently has about 30 employees in research and development, is set to target emerging markets.
That’s different from the manufacturer’s research-and-development operations today, which span Skaneateles Falls, Beaverton, Singapore, and Ireland. The locations’ roles are not currently clearly defined, Meyer says.
The future of Welch Allyn’s Ireland operation has yet to be decided. The company plans to spend 90 days evaluating all of its European functions, according to Meyer. It will also reorganize its business in Latin America.
Welch Allyn will start its 10 percent job cut by searching for voluntary reductions, Meyer says. It will then move on to involuntary eliminations. The company will reimburse laid-off workers up to $4,000 each in educational costs and offer a “generous separation package,” Welch Allyn said in a news release.
Contact Seltzer at rseltzer@cnybj.com