In a strategic move, ICU Medical has revealed plans to permanently shut down a manufacturing facility in Minnesota, a decision that will result in several dozen workers being laid off. The company’s intentions were formally outlined in a notice filed last week with the state’s Department of Employment and Economic Development, along with the mayor of Oakdale, in compliance with the federal Worker Adjustment and Retraining Notification (WARN) act. This act mandates employers to provide advance notice of mass layoffs, allowing affected employees adequate time to prepare.
A total of 82 positions are slated to be affected by this decision, according to a spokesperson. The series of job cuts is scheduled to commence on October 19 and will unfold in phases until the culmination of the next year. The facility, located in Oakdale—a suburb situated east of St. Paul—will ultimately cease operations by December 31, 2024.
The Minnesota facility was acquired by ICU Medical as part of its recent purchase of Smiths Medical. This acquisition, completed earlier this year, involved a cash payment of $1.85 billion for the Minneapolis-based company, coupled with an additional $500 million in ICU Medical shares and the possibility of up to $100 million more based on the performance of the combined entity’s stock.
The decision to shutter the facility was rooted in ICU Medical’s comprehensive evaluation of its operations and broader US manufacturing footprint. The company’s financial trajectory has been a mix of growth and challenges. While 2022 witnessed over 70% revenue growth compared to the previous year, ICU Medical also incurred significant losses, recording a net loss exceeding $74 million for the year. In contrast, the first half of this year saw ICU Medical making strides toward recovery. Despite a modest revenue increase of just over 1%, the company’s net loss shrunk to under $20 million, a notable improvement from the $45.5 million loss reported at the same time in the previous year.
As ICU Medical navigates this transition, its strategy reflects a deliberate effort to optimize operations and adapt to evolving market dynamics. This development underscores the company’s commitment to efficient resource allocation while striving to maintain its financial health.
