Baxter To Cut 1,400 Jobs

The job cuts come after a quarter of falling sales and the addition of a hedge fund executive to the medical device maker's board of directors.
Katie Kuehner-HebertOctober 27, 2015
Baxter To Cut 1,400 Jobs

After Baxter International on Tuesday posted better-than-expected adjusted earnings for the third quarter, the Deerfield, Ill.-based medical device maker said it would cut about 1,400 jobs worldwide to achieve $130 million in annual cost-savings.

The cuts come after Baxter spun off its bioscience business, called Baxalta, in July, according to the Daily Herald, a suburban Chicago publication.

“We are aligning our infrastructure with our new status as a stand-alone medical products company to better support our business portfolio and advance our priorities,” Baxter spokeswoman Deborah Spak told the Daily Herald.

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The 1,400 positions to be eliminated are nonmanufacturing, and represent about 5% of the company’s global workforce, Spak said. No particular geographic location would be impacted more significantly than others. Two-thirds of Baxter’s global workforce is located outside the United States.

Just last month Baxter reached a settlement with Daniel Loeb’s Third Point LLC, giving the activist a seat on the board. Third Point partner Munib Islam was added to Baxter’s board and placed on the executive search committee, formed in July to find a successor to CEO Robert Parkinson, who is leaving the company after 11 years.

Earlier on Tuesday, Baxter reported a third-quarter profit of $1 million, on revenue of $2.49 billion. Five analysts surveyed by Zacks expected $2.46 billion.

Sales of hospital products fell 7%, to $1.5 billion, and sales of renal products fell 11%, to $943 million. The company blamed the sales declines on unfavorable foreign exchange rates.

For the third quarter, Baxter said it had net income of less than 1 cent on a per-share basis. Earnings, adjusted for nonrecurring costs and to account for discontinued operations, were 41 cents per share. The results topped Wall Street analysts’ expectations.

For the fourth quarter, Baxter expects its per-share earnings to range from 30 cents to 32 cents.