Do Medtronic's Layoffs Raise a Red Flag?


The medical device industry as a whole is under fire. Pricing pressures, the ongoing European recession, and tough competition have all come together to hit revenues at leading device makers. Medtronic hasn't been immune to those damages as the largest pure medical device maker, and its spine business -- its second-largest segment by sales -- has seen revenue fall 5% over the last nine months as a result.

What's Medtronic's response? The company plans to cut 230 jobs at its spine business and slash costs by 5% in order to compensate for the falling sales. With other companies in the industry also seeing spine revenue lagging -- Stryker's own spine sales fell 4% in 2012 -- will this measure be enough? Motley Fool contributor Dan Carroll and health care analyst Max Macaluso discuss this question and more in the video below.

While you can certainly make huge gains in biotech and pharmaceuticals, the best investing approach is to choose great companies and stick with them for the long term. The Motley Fool's free report "3 Stocks That Will Help You Retire Rich" names stocks that could help you build long-term wealth and retire well, along with some winning wealth-building strategies that every investor should be aware of. Click here now to keep reading.

The article Do Medtronic's Layoffs Raise a Red Flag? originally appeared on

Fool contributor Dan Carroll has no position in any stocks mentioned. The Motley Fool owns shares of Medtronic and Zimmer Holdings. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Copyright © 1995 - 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.