Over the last year and a half, the medical device industry has experienced significant job cuts, shedding over 14,000 positions across the United States. These layoffs have not just affected large firms; companies of all sizes within numerous medical technology sectors have been impacted. The need to curtail operational expenses, close down facilities, or reorganize corporate structures has driven this trend, which MedTech Dive has monitored through an analysis of Worker Adjustment and Retraining Notification (WARN) filings from January 1, 2023, to June 30, 2024.
While the entire medical device industry has felt the effects of these layoffs, the diagnostics sector has been particularly hard hit, losing over 5,000 jobs during the reviewed period. The decline in testing demand post-COVID-19 has severely impacted this area. Notably, Cue Health, a significant player in diagnostics, announced over 1,200 job cuts before deciding to cease operations entirely in May 2023. Besides Cue Health, major industry players like Johnson & Johnson, Medtronic, Abbott, and Thermo Fisher Scientific have all made substantial layoffs.
Despite some recovery and return to growth reported in the latter months analyzed, the layoffs persisted, although the pace decreased slightly. After peaking in the second quarter of 2023 with over 4,000 layoffs, the numbers tapered slightly but maintained a baseline, with over 1,800 layoffs reported in each subsequent quarter.
MedTech Dive’s analysis was meticulous and adhered to stringent criteria, focusing solely on WARN filings, which are required by the WARN Act whenever a company with at least 100 employees plans a layoff affecting 50 or more individuals or closes a plant. The analysis covered filings across all states, except for Arkansas, which lacks a public WARN database. These filings provide advance notice, usually 60 days, helping to prepare affected employees and communities for the impending job losses.
MedTech Dive’s methodology involved collecting and verifying state WARN filings related specifically to the medical device sector, defined as any company producing FDA-regulated medical device products. Filings were filtered to exclude duplicates, and only those relevant to medical devices were considered. Notably, some states like California provide more detailed reports, including the number of employees affected at each location, allowing for a more nuanced understanding of the layoffs’ impact.
The meaning behind these layoffs spans various economic pressures, from immediate impacts linked to the reduction in COVID-19 related demand to broader economic challenges and strategic restructurations within companies. As some companies face faltering circumstances or unforeseeable business changes, the trend reflects broader issues within the industry and the global economy.
Overall, while the total number of layoffs has declined since reaching a peak, the consistent number of layoffs reported across several quarters suggests persistent instability within the medical device industry. Moving forward, the sector may need to adapt further as the post-pandrymic landscape continues to evolve, potentially leading to more restructurings or strategic adjustments. The ongoing monitoring of WARN filings will be crucial in understanding the full extent and ramifications of job cuts in the medical device industry.
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