(Reuters) – Medical device maker Baxter International on Thursday forecast 2023 profit well below Wall Street estimates and said it would cut up to 5% of its global workforce.
Shares of the company fell 15.5% to a near seven-year low of $38.58, as it highlighted continued pressure from inflationary pressures and higher inventory costs this year.
Medical device makers are still grappling with supply-chain shortages that began during the pandemic, with rising costs of raw materials, labor and transportation piling on more pressure.
Baxter, which is in the process of spinning off its kidney care units, is also exploring alternatives for its biopharma solutions business, including a potential sale.
The company revealed plans to consolidate its operations into four units in the coming months, adding that it will begin financial reporting with its new segments during the second half of 2023.
Baxter expects to save over $300 million through its cost reduction plans, including the layoffs, in 2023.
The company said it expects to earn profit in the range of $2.75 per share and $2.95 per share, below analysts’ expectations of $3.56, according to Refinitiv.
As of Dec.31, Baxter had about 60,000 employees globally, according to its latest annual regulatory filing.
(Reporting by Bhanvi Satija in Bengaluru; Editing by Sriraj Kalluvila)
