Insulet Lays Off 10% of Workforce
This past Monday Insulet (NASDAQ:PODD) laid off 10% of their workforce. Of the 31 positions eliminated 26 came from the manufacturing facility located in Bedford, MA. Now that 85% of Insulet’s production is coming from overseas and the quality control issues have been resolved the company is comfortable Flextronics can handle pod production.
The remaining cuts came from various sales and administrative positions.
This news really should come as no surprise as Insulet has made it clear in previous earnings calls they had no intention of maintaining a full blown production facility in the US. It’s also no secret that the company needed to trim its cash burn.
The key for Insulet remains the same, lower cost of goods sold and become consistently profitable. By accomplishing these two goals Insulet will become even more attractive to larger rival or another device maker looking to enter the insulin pump market or expand their pump offerings.
The company has already validated the concept of wireless pumping, as all the conventional pump companies are rushing to come out with their own patch pump. There are also several Insulet wannabes who think they can do the same thing as Insulet only cheaper.
With Deltec sinking into the abyss and the new Accu-Chek Spirit another major Roche blunder, the insulin pump market is a three horse race between market leader Medtronic (NYSE:MDT), Animas, a division of Johnson and Johnson (NYSE:JNJ) and Insulet. While it’s doubtful either Animas or Insulet could overtake Medtronic, a combination of these two companies would forever change the insulin pump landscape. Something to think about.
