Boston Scientific to shed 500 jobs in cardiac product reorganisation

11 January 2006

Natick, Mass., USA. Boston Scientific Corporation (NYSE: BSX) has announced measures to restore confidence in its cardiac rhythm management (CRM) products and regain market share.

The company says the plan will result in a reduction of the CRM workforce by approximately 500 to 600 employees in the first quarter of 2007. Positions will be eliminated in research and development as well as a number of other functions. The plan is expected to result in after-tax costs of approximately $70 million, which include change-in-control payments related to last year's acquisition of Guidant by Boston Scientific.

"This plan will shift resources from less productive projects to more productive ones, reinvigorating our product pipeline and driving top-line growth," said Jim Tobin, President and Chief Executive Officer of Boston Scientific.

"It is designed to increase the productivity of our research and development so we can deliver more and better products. This is a different approach that will require us to be more selective, more disciplined and more focused. This plan — coupled with strengthened sales and marketing execution — will better align our resources to take advantage of the substantial opportunities in the CRM space. Above all, it will allow us to better serve physicians and patients with an improved flow of new products."

The Company today also released preliminary CRM net sales for the fourth quarter of 2006 of approximately $489 million, a 10% increase over net sales of $446 million in the third quarter of 2006.

"We were pleased with our sequential quarterly sales increase, and we believe the CRM market is starting to resume its growth," said Tobin. "Fourth quarter sales of implantable cardioverter defibrillators (ICDs) were approximately $356 million — a 13 percent increase over the third quarter — which indicates a strengthening of our number two position in the ICD market."

The majority of the job losses will occur at the Boston Scientific CRM facility in Arden Hills, Minnesota, USA. Boston Scientific currently employs approximately 29,000 people worldwide.

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