Before joining PlasticsToday, I helmed several business-to-business publications covering the global medical device industry. We would often stress the sector’s steady, solid growth under varying macroeconomic scenarios. This was distilled in a phrase that described the industry as “recession proof.” A bold statement but one that, more often than not, was borne out by events. In today’s confounding economy — full employment with labor shortages in some sectors clouded by incessant predictions of a coming recession — that axiom is being put to the test.
Several medical technology companies have announced layoffs in the past few months. Among the most notable are:
Baxter shedding nearly 5% of its workforce;
Philips eliminating about 6,000 jobs, as it wrestles with the financial consequences of a massive recall of ventilators and sleep apnea masks;
Johnson & Johnson laying off 57 workers at its Greenfield plant in Pennsylvania
Many more layoffs have been announced since the beginning of this year. For those wanting to keep score, Fierce Biotech has published a Layoff Tracker. The media outlet said that it had hoped the tracker would “stay retired for a while” after the bounty crop of layoffs in 2022. “The latest clutch of staff reductions that have kicked off the year could just be a hangover from the brutal market of 2022. And companies are said to be waiting for the J.P. Morgan Healthcare Conference to see whether the industry is going to reset,” writes Senior Editor Annalee Armstrong.
The fact is, with some exceptions, the layoffs have been fairly limited in scope. Some companies are “right sizing” in response to expected headwinds in the larger global economy as a potential recession looms and, in some cases, pruning operations in preparation for a business restructuring (J&J).
I’m not ready to retire the “recession-proof” descriptor just yet, and, although I’m no economist, I do wonder about this recession that I keep hearing about. Of course, you can never go wrong predicting that a recession will come — it’s built into the economic cycle of capitalism — but you would be a genius if you could say when it will hit and how severe it will be. And there are relatively few geniuses alive at any given time.
