Friday, August 5, 2011

New Covidien chief Almeida eyes staff growth outside U.S.

By Julie M. Donnelly, Boston Business Journal

Covidien plc (NYSE: COV) CEO José (Joe) E. Almeida said Thursday that the life sciences company is likely to add workers outside the United States, as a growing portion of the company’s revenues come from international sales.

“We need to do more with the right people in the right places,” Almeida said at a gathering of medical device executives in Boston Thursday, when asked about the jobs impact of restructuring plans announced last week as part of the company’s earnings release. The restructuring, which will include unspecified layoffs, is expected to save Covidien between $175 million and $225 million per year, by 2014.

Meanwhile, Covidien plans to hire outside the U.S. “Slightly less than half of our revenues come from outside the U.S., so we need more people in places like the U.K. and Singapore,” Almeida said. “We need to grow our workforce outside the U.S.”

Covidien is incorporated in Ireland but has corporate headquarters in Mansfield, with close to 2,000 employees in the state. Almeida said he does not foresee layoffs this year in Massachusetts associated with the restructuring, but warned that business conditions could change.

One overhang on the company is the implementation of the 2.3 percent medical device excise tax that was part of the national health overhaul law, set to go into effect in 2013.

“It was an unfortunate decision to single out our industry – medical devices are part of the solution, not the problem, in terms of lowering costs,” Almeida said.

The new tax could cost Covidien $100 million or more per year, executives said.

Almeida has been in the chief executive job for a little over a month, having replaced retiring chief executive Richard J. Meelia, effective July 1. His tenure began with an administrative shake-up that removed two executives.