Medtronic unveils restructuring plan that could create $450-$475M in yearly savings — 7 details

Angie Stewart -   Print  |

Medtronic is embarking on a restructuring plan expected to create annual savings of $450 million to $475 million by fiscal year 2023, according to a Sept. 1 filing with the Securities and Exchange Commission.

Seven things to know:

1. In an effort to simplify organizational structure and accelerate decision making and execution, Medtronic is reorganizing its existing groups as operating units focused on specific therapy areas.

2. Leaders of the operating units will have full decision making authority, responsibility and accountability for their individual businesses and markets, including oversight of product development and clinical resources.

3. Medtronic also plans to consolidate enterprise-level operations, including global manufacturing, supply chain and facilities, and to evaluate how the restructuring affects external reporting of its segments.

4. Medtronic's transition to the new operating model will begin in its third fiscal quarter and take full effect in the fourth quarter of fiscal year 2021.

5. The company's Simplification Restructuring Program is expected to incur $400 million to $450 million in pre-tax costs by the end of fiscal year 2022. Savings are expected to start this fiscal year.

6. Through the restructuring, Medtronic aims to become "a more nimble and competitive organization focused on accelerating innovation, enhancing the customer experience, driving revenue growth, and winning market share, while at the same time more efficiently and effectively leveraging its enterprise scale."

7. The restructuring will entail an unspecified number of job cuts, Medtronic confirmed in response to a question from the StarTribuneThe company said affected employees are being notified but declined to release exact numbers or locations.

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