Invacare announces another round of layoffs

Since 2014, company has reduced workforce by about 370 associates
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Friday, May 26, 2017

ELYRIA, Ohio – Invacare is reducing its workforce by another 50 associates in North America, the company announced in a May 24 press release.

Invacare says the layoffs, which a company official describes as “cross functional,” are part of larger efforts to be more efficient.

“Realigning our infrastructure, paced by available resources and cash, is an essential part of our becoming a more sustainably profitable, growing business,” said Matt Monaghan, chairman, president and CEO, in a press release.

Invacare expects the layoffs to generate an incremental $2.7 million in annualized pre-tax savings, on top of $9.2 million in savings from other actions it has taken since October 2016. As a result of the layoffs, Invacare expects to incur restructuring charges of about $700,000 on a pre-tax basis that will be expensed in the second quarter of 2017.

Earlier this year, in late January, Invacare announced it was reducing its workforce by about 100 associates, a move that it expected to generate about $6.6 million annually in pre-tax savings. At that time, a company spokeswoman said the company still employed about 4,600 associates globally.

Last year, in November, Invacare said it “right-sized” certain parts of its North America/HME business in line with shifts in staffing needs, a move that it expected to save about $2.6 million annually, but it did not specify a reduction in its workforce.

Invacare also reduced its workforce in 2015, when the company laid off 30 associates, 20 at its North Ridgeville campus in Elyria; and in 2014, when it laid off 190 associates, 60 at the North Ridgeville campus.

While there have been a number of layoffs, Invacare has also added associates in sales, R&D, engineering and quality control, says Lara Mahoney, vice president of investor relations and corporate communications.

“We need to make investments in certain skills, but at the same time, while sales are coming down, we need to make sure the infrastructure is realigned as part of that,” she said. “It’s all about how can we simplify the business, reduce cost, reduce inefficiencies and make the company easier to do business with. We’ve seen opportunities to change the way we do things on a cross functional basis.”

Since 2012, Invacare has been under a consent decree with the U.S. Food and Drug Administration that has limited its ability to make and sell certain products from its corporate headquarters and Taylor Street manufacturing facility. The company announced recently that the FDA has now approved three certification reports from its third-party auditor and it is now waiting for the agency to re-inspect its facilities.

The decree, along with Monaghan taking the reins at the company in 2015, has resulted in the company making several moves to specialize its product portfolio, jettisoning more consumer-type products and prioritizing more custom products.

“Our transformation emphasizes quality, patient-centric solutions, streamlined customer engagements and reduced costs,” Monaghan said. “We remain focused on improving profitability and managing cash flow to support the extended transformation of future sales growth.”

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