Project Hercules = Big Job Cuts

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Anonymous

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Announcements to come that large scale job cuts are coming to the surgical solutions group. The group to be impacted the most is EMID. Recent performance and overlap with Ebd to be strongly considered. The standard 2 weeks for each year of service will be honored and most cuts will occur within the next few weeks. This will be a massive blood letting all due to poor performance and inefficiency in the EMID group. Managers are already aware of the specifics and are being told to hold out on discussions.
 












I am hearing very similar scenarios. I have been told the reason CB wants to have these conference calls is to start the ball rolling. Many of the "rumors" are true. Senior management wants to make the cuts on their terms not ours. My manager has told me to go ahead and encourage my reports to start exploring opportunities in the market but let them know that non competes will be enforced.
 












Cuts will happen. The will do anything to increase profits. Most who have jobs today in corporate will very gone in 6 months. 50% of the energy and emid force are gone and say goodbye to hernia and woundclosure.
Just a miserable place to work here career growth dies.
 






So your out of a job, but if you goto an open
Job that turns out to be a competitor, they will
Sue you for non compete? What a joke.

Deny all non competes that are signed. They can't verify that
And it will only hurt you if you admit signing a non compete.
 






Anonymous said:
Cuts will happen. The will do anything to increase profits. Most who have jobs today in corporate will very gone in 6 months. 50% of the energy and emid force are gone and say goodbye to hernia and woundclosure.
Just a miserable place to work here career growth dies.
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What are you talking about? You can't drop 50% of EMID and EBD and ALSO kill WC and Hernia. The reps left could not possibly handle that.

I would believe (and have heard) that they are consolidating EMID, EBD, hernia and WC in large cities where it makes sense but it would be impossible to do that in large geographic areas. Jobs will be cut but it won't be 75% of the Salesforce in one whack.
 






AVP's are being evaluated and will be consolidated between EMID and EBD. WC and Hernia will be consolidated also. The hernia movement is dead so it's time to put it back where it was. Project just started, consulting group will be here for 6-12 months most likely. This is not going to happen overnight. Final quarter of the FY, they are not going to do massive layoffs during this time period to hurt their numbers. You'll see the wave start Q1 of FY '13 after the final numbers are in at the earliest. You also have to put into play the fact that whichever reps are kept, they will have to go through the other's training program and let's be honest, easier for the EMID rep to pick up EBD than the other way around when it comes to products. So if you chop the heads off, add the separation package, take into account co. cars, expenses, healthcare benefits cost, etc. it shouild save these divisions $40 million or so projecting 125 cuts among them. Does that cover the missed number by 1 division this year???
 












Massive cuts have been confirmed...they will lie until the very end. Look at what they did when they consolidated surgical solutions at the corporate level, same will now happen for the field.
 












From someone on the project panel take this for what it is worth. No cuts to Ebd. The group by far produces the highest ROI to the company and more efficient than the others in Surgical Solutions. Most of the cuts will come in the form of reps, AVP's and RM's from EMID. EMID has peaked and most of the products are commodities and can be sold from a "piece of paper" much like distributors. This straight from the mouth of those on the panel and with the BCG group. Hernia and ST to have consolidations as well.


Anonymous said:
Surgical solutions = No career
Start looking because the clock is ticking
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With all the cuts that Surgical Solutions is making, I'm pretty sure the ultimate goal is to have one person do everything in the company, while the leadership team continues to look for ways to cut people.
 






Anonymous said:
From someone on the project panel take this for what it is worth. No cuts to Ebd. The group by far produces the highest ROI to the company and more efficient than the others in Surgical Solutions. Most of the cuts will come in the form of reps, AVP's and RM's from EMID. EMID has peaked and most of the products are commodities and can be sold from a "piece of paper" much like distributors. This straight from the mouth of those on the panel and with the BCG group. Hernia and ST to have consolidations as well.
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What leadership doesn't get, and most don't unless they are in the accounts daily, is that the relationships the EMID side has developed really does matter. If Covidien dumps some of these longer term reps, a lot of their former accounts will eventually bail. Maybe not all at once due to some contracts but the thoracic and bariatric surgeons will switch. They see the loyalty that their reps have given them and they'll respond in kind. Distributors reps don't have that level of loyalty and the Ebd reps don't either.
I know some of you naysayers will chime in and say it won't matter but it happens all the time. Cutting people that have worked these accounts every day will end up doing more harm over the long haul than the short term ROI.
 












Maybe but Hansen has stated to other committee members that the fat is in EMID. He has been quoted as saying that EBT has nothing to worry about and EMID has not pulled its weight in a long time. This has all been planned from the beginning. The changes will be swift and massive.








UOTE=Anonymous;4428016]What leadership doesn't get, and most don't unless they are in the accounts daily, is that the relationships the EMID side has developed really does matter. If Covidien dumps some of these longer term reps, a lot of their former accounts will eventually bail. Maybe not all at once due to some contracts but the thoracic and bariatric surgeons will switch. They see the loyalty that their reps have given them and they'll respond in kind. Distributors reps don't have that level of loyalty and the Ebd reps don't either.
I know some of you naysayers will chime in and say it won't matter but it happens all the time. Cutting people that have worked these accounts every day will end up doing more harm over the long haul than the short term ROI.[/QUOTE]
 






The issue with EMID is threefold:

1-Core business is being comoditized on a daily basis which is taking control away from the sales rep
2-Physicians being bought by larger and larger health systems eliminating the ability to influence physician decision making
3-Margin doesn't matter when the SGA is close to 40%

The posts on this board about what a bad company Covidien is are a joke. The current healthcare landscape is changing constantly and the current Surgical structure does not fit what is happening now and does not fit what is needed in the near future. Any change or reduction to the field sales force is trying to reduce SGA to a more acceptable level and one that lines up more with future margin expectations. EMID has too high of a cost of sales to promote the products in their bag. That is a fact.
 






Anonymous said:
The issue with EMID is threefold:

1-Core business is being comoditized on a daily basis which is taking control away from the sales rep
2-Physicians being bought by larger and larger health systems eliminating the ability to influence physician decision making
3-Margin doesn't matter when the SGA is close to 40%

The posts on this board about what a bad company Covidien is are a joke. The current healthcare landscape is changing constantly and the current Surgical structure does not fit what is happening now and does not fit what is needed in the near future. Any change or reduction to the field sales force is trying to reduce SGA to a more acceptable level and one that lines up more with future margin expectations. EMID has too high of a cost of sales to promote the products in their bag. That is a fact.
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Well said by someone who knows that in the heck they are talking about. Covidien is a fantastic company and does what every other device manufacturer in the world does.....ensures it future by making sound business decisions. I'm not sure why certain people get on here and blast a company when it does what it's supposed to do...maximize profits!!!!!
 






Anonymous said:
The issue with EMID is threefold:

1-Core business is being comoditized on a daily basis which is taking control away from the sales rep
2-Physicians being bought by larger and larger health systems eliminating the ability to influence physician decision making
3-Margin doesn't matter when the SGA is close to 40%

The posts on this board about what a bad company Covidien is are a joke. The current healthcare landscape is changing constantly and the current Surgical structure does not fit what is happening now and does not fit what is needed in the near future. Any change or reduction to the field sales force is trying to reduce SGA to a more acceptable level and one that lines up more with future margin expectations. EMID has too high of a cost of sales to promote the products in their bag. That is a fact.
Click to expand...

This is an adequate statement but the poster leaves out one important point. The older AutoSuture reps are the best trained, most knowledgable, and have the strongest relationships in the company. I believe the VL management team know this and will keep most of them around.
 






I do not have a dog in that fight but as an investor who comes on these boards to try and find some information I can use. A lot of rumors and wishful thinking, but in reality you should study the thinking and history of the BCG. They are the ones who are making the recommendations. Thought this was interesting with regard to BCG Experience Curve and
Strategic consequences of the effect.
"The BCG strategists examined the consequences of the experience effect for businesses. They concluded that because relatively low cost of operations is a very powerful strategic advantage, firms should capitalize on these learning and experience effects. [6] The reasoning is increased activity leads to increased learning, which leads to lower costs, which can lead to lower prices, which can lead to increased market share, which can lead to increased profitability and market dominance. According to BCG, the most effective business strategy was one of striving for market dominance in this way. This was particularly true when a firm had an early leadership in market share. It was claimed that if you cannot get enough market share to be competitive, you should get out of that business and concentrate your resources where you can take advantage of experience effects and gain dominant market share. The BCG strategists developed product portfolio techniques like the BCG Matrix (in part) to manage this strategy.
Today we recognize that there are other strategies that are just as effective as cost leadership so we need not limit ourselves to this one path.[citation needed] See for example Porter generic strategies which talks about product differentiation and focused market segmentation as two alternatives to cost leadership.
One consequence of the experience curve effect is that cost savings should be passed on as price decreases rather than kept as profit margin increases.[citation needed] The BCG strategists felt that maintaining a relatively high price, although very profitable in the short run, spelled disaster for the strategy in the long run. They felt that it encouraged competitors to enter the market, triggering a steep price decline and a competitive shakeout. If prices were reduced as unit costs fell (due to experience curve effects), then competitive entry would be discouraged and one's market share maintained. Using this strategy, you could always stay one step ahead of new or existing rivals." If say EBT and EMID both have serious market potential to dominate, which has already been established then you can either reduce cost by cutting a boatload of sales reps or simply cut higher income managers and higher paid sales reps in both divisions. Why not just higher cheaper alternatives, limit commissions. Do this to Lessen the cost of the product to gain higher market share. Bottom feeders if you will. Should be interesting.
 






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