Baxter to cut global workforce up to 5% as part of cost reduction
Deerfield-based Baxter International, a medical products and services firm, announced Thursday it will cut its global workforce up to 5% as part of a cost-reduction program.
The action will come in tandem with an operating redesign expected to be finalized this spring, according to the company. What that means for local facilities in Deerfield and Round Lake was not immediately clear.
As of Dec. 31, Baxter had about 60,000 employees globally according to its latest annual regulatory filing, Reuters reported.
Baxter makes diagnostic, critical and kidney care, nutrition, hospital and surgical products for use in homes, hospitals and doctors' offices.
The cost reductions are being made in response to "significant macroeconomic challenges" over the past two years, according to the company.
Company shares fell 15.5% to a near seven-year low of $38.58, Reuters reported.
"This initiative and additional actions the company has undertaken to enhance performance are expected to deliver more than $300 million in total saving during 2023," the company said in a news release. "These actions are currently expected to result in a global workforce reduction of less than 5%."
Baxter in coming months plans a series of changes to simplify operations, improve efficiencies and accelerate future growth. That will involve consolidating operations into four units focused on broad therapeutic areas.
Financial challenges and supply-chain issues continue to weigh on business performance and underscore the need for decisive action to create value for patients, shareholders and stakeholder communities, said Jose (Joe) E. Almeida, chairman, president and chief executive officer in the release.
He said plans announced last month to spin off a new kidney care company and implement a new operating model for remaining businesses "will enhance the potential for growth and innovation across both entities," he added.
"While the opportunities ahead are clear, the journey will involve some difficult decisions," Almeida said. He said the necessary actions would be taken with the "utmost care and sensitivity."
"We are poised to emerge transformed for a new era, better positioned to compete in the dynamic health care marketplace and create value our stakeholders," he added.
After eight months on the market, Baxter appeared ready to sell its Deerfield headquarters. The company confirmed about two weeks ago that it had identified a prospective buyer for the property, which includes 645,688 square feet of office space on more than 101 acres.