A global restructuring of medical supplies manufacturer Welch Allyn will result in a net job loss at the company's Skaneateles Falls headquarters of about 45 over the next three years, with no layoffs from the manufacturing floor, CEO Steve Meyer said Monday.
Meyer said the restructuring plan, which includes an estimated 10 percent cut to the company's 2,750 employees worldwide, will prepare the company for a new 2.3 percent domestic sales tax scheduled to go into effect in January as part of the Affordable Care Act enacted in March 2010.
"If you look across the industry, you will find a plethora of restructuring and workforce reductions taking place as we speak," the CEO said. "As a private company, we had the luxury of holding off as long as we could hoping that it would be rescinded, or delayed, or we would find our own internal pearls that might help us solve the challenge, but we could just not wait any longer."
As a major part of Welch Allyn's restructuring, the company's patient monitoring, systems and low acuity vital signs manufacturing operations will move from its Beaverton, Ore., facility to Skaneateles Falls. The manufacturing of thermometer probe covers, lamps and blood pressure cuffs will be relocated from Skaneateles Falls to a Tijuana, Mexico, plant.
Meyer said approximately 160 jobs will be eliminated from the Oregon location over the next three years.
"We'd like Skaneateles to be a high-tech hub, focused on our more high-tech devices, while in Tijuana we'll be focused more on our labor-intensive product lines," he said.
Meyer said the 45 local job cuts will not come from the manufacturing floor, but rather from "up and down" the other employment areas.
The cuts will be accomplished by a combination of retirements and layoffs, but Meyer said the exact ratio is not yet set.
"It's going to be a process," he said. "We have a very detailed project schedule with a bunch of work streams with multiple pieces that take place at a time so we don't disrupt business."
The company will also establish research and development centers in Beaverton, Skaneateles Falls and Singapore and plans to evaluate its European operations and reorganize its Latin American business.
Meyer said Welch Allyn plans to focus more heavily on emerging markets in Asia and elsewhere while demand for its products cools in the U.S. and western Europe.
"We've made investments and had small expansions in those markets over the last five years," he said. "Health care spending in those regions, although smaller per capita, is rising quickly as countries and governments bring up their levels of care where there was very little in the past."
New York politicians, including Republican U.S. Rep. Ann Marie Buerkle and U.S. Senate candidate Wendy Long were quick to seize on the restructuring announcement Monday, issuing statements denouncing the pending tax increases and their opponents who voted for the Affordable Care Act.
But Meyer said he and other company leadership were more concerned with the impact of the legislation than the politics behind its passing.
"We all know the history behind the Affordable Care Act," he said. "What we care about is not as much the politics, what we care about is the people. These are real decisions and real impacts. The only message we want to send to leadership is we hope they are aware of that."