By the end of April, Medtronic plans to close more than five manufacturing sites and six distribution centers as part of restructuring efforts to improve the company's profit margin.
Medtronic — based in Ireland, but run from Fridley — also is tightening its supplier network, CEO Geoff Martha said Monday at the J.P. Morgan Healthcare Conference in San Francisco. The company has ceased business with more than 200 suppliers.
The company refused to disclose which manufacturing locations will be affected; the company on its website said it has 78 plants globally. Martha said the six distribution centers will be consolidated into two other locations that will become megacenters. Medtronic also declined to say where those larger centers would be located.
"We have no specifics to share right now," said spokeswoman Erika Winkels. "Consistent with operations best practices, we are always evaluating our manufacturing and distribution footprint for efficiencies that improve our performance."
Winkels also did not comment on the number of jobs affected by the shutdowns.
During the presentation, Medtronic Chief Financial Officer Karen Parkhill said the company is "managing within the headcount that we've got."
Martha said that the moves, focused on its global operations and supply chain, are aimed to drive the "largest near-term savings" for the company.
Martha said the company has been evaluating every aspect of the supply chain over the past few years. He said progress is trackable, but inflation and other factors have meant the company has not yet widened profit margins.
Martha said that Medtronic has been undergoing a "comprehensive transformation" and said "we've been driving efficiencies."
The wide-ranging update for industry analysts and insiders also touched on product updates and goals. Martha and Parkhill both said progress in those areas should continue to drive mid-single-digit revenue growth.
But as inflationary pressure eases, investors should see some more progress in profit growth, Martha said.
Last February Martha said that the company had started making "significant cost reductions" in response to macroeconomic issues. In April, Medtronic began global layoffs. The company has not disclosed how many employees were laid off.
Medtronic's most recent annual financial filing listed its 15 largest manufacturing locations. Beyond Minnesota, the company has domestic manufacturing operations in Connecticut, California, Colorado, Arizona, Florida, Massachusetts and Puerto Rico. It has global manufacturing locations in Mexico, China, Ireland, Switzerland, France, Italy and the Dominican Republic.
Ranked by square footage, the company's top five largest manufacturing operations are in Connecticut, Puerto Rico, Mexico, China and Minnesota.
Medtronic's annual financial documents, filed in June, indicate that the company has more than 95,000 employees globally. Of that total, 43% are based in the U.S. or Puerto Rico.
The annual J.P. Morgan Healthcare Conference, a major med-tech business event for both companies and investors, is now in its 42nd year.