Report Sees Big Growth in Medical Device Staffing

The megamerger trend has had a tremendous — and positive — impact on jobs, according to a new report that found increased headcounts in 2014 for the top medical device companies.

That news come from Evaluate, which analyzes the life sciences industries, through its EP Vantage report titled Fewer, but bigger: medtech jobs jump thanks to mergers.

“Not one of the top 15 medtech companies by market capitalization saw a net decrease in staff numbers over the last year,” according to Elizabeth Cairns, one of the report’s authors. “It could be that the economic upturn in the U.S. is making medtech companies more confident of growing sales, and they are hiring accordingly.”

The analysis only looked at companies that received at least 40 percent of their sales from medical technologies. As a result of its divestiture of its Ortho-Clinical Diagnostics business, titan Johnson & Johnson failed to meet the criteria.

Leading the Pack

So, who came out on top? Thanks to its takeover of Covidien, Medtronic is the biggest company in terms of headcount, with more than 90,000 employees at the end of fiscal year 2014. That’s an 88 percent growth over 2013, when the company had 49,000 employees.

When taking out the employees added as a result of the Covidien acquisition, Medtronic’s headcount grew by 3,500, or 7 percent.

Prior to 2014, Medtronic’s staffing was relatively stable over the previous four years, starting at 43,000 in 2009.

Coming in second in terms of year over year growth is Smith & Nephew at 22 percent. Its $1.5 billion purchase of ArthroCare added about 1,800 jobs last year. Abbott Laboratories, whose staffing has ebbed and flowed, particularly in the wake its 2012 split with AbbVie. Between 2012 and 2013, Abbott saw the number of employees drop from 91,000 to 69,000. It has since rebounded to 77,000, a 12 percent increase.

The rest of the companies in the top 5 are Baxter International, adding 5,000, B. Braun, 4,128, and Essilor International, 2,903.

While St. Jude Medical was the only company whose numbers remained stagnant, that may change if its $3.4 billion proposed acquisition of Thoratec goes through (IDDM, July 24). Zimmer’s acquisition of Biomet, and Becton, Dickinson’s pick up of CareFusion also should continue the trend.

In terms of percentage of staff added, Exact Sciences increased 131 percent, driven by the launch of its colorectal cancer stool test. While not in the top 15 companies in terms of size, Exact’s current headcount stands at 236. Other small companies that saw a big rise are Cogentix Medical, which saw its ranks grow 81 percent to 214.

Tax’s Limited Impact

The increase in staff comes even as Congress works to repeal the medical device excise tax, which many companies say will eliminate jobs. The authors say the tax hasn’t had much of an impact on employment in the device sector.

“It is true that companies had warned that they would have to cut staff in order to meet the tax’s demands, but employment in the medtech sector has remained roughly steady for the last three years,” Cairns tells IDDM.

That is particularly true among the larger players, she says, although some companies have had to restructure, blaming the tax.

Earlier this year, industry trade group AdvaMed claimed the 2.3 percent tax is costing the U.S. economy roughly 195,000 jobs since it took effect in January 2013. However, an economic analysis by the Congressional Research Service played down the tax’s impact, putting industrywide job losses at 1,200 or fewer employees (IDDM, Jan 30). — Elizabeth Hollis