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STJ > SEC Filings for STJ > Form 8-K on 1-Nov-2012All Recent SEC Filings

Show all filings for ST JUDE MEDICAL INC

Form 8-K for ST JUDE MEDICAL INC


1-Nov-2012

Costs Associated with Exit or Disposal Activities


Item 2.05 Costs Associated With Exit or Disposal Activities.

In August 2012, St. Jude Medical, Inc. (the "Company") announced that it was realigning its product divisions into two new operating units: the Cardiovascular and Ablation Technologies Division and the Implantable Electronic Systems Division (the "2012 Business Realignment Plan"). In connection with this decision, the Company also announced it will centralize several of the Company's support functions, including information technology, human resources, legal, business development and certain marketing functions. These organizational changes are part of a comprehensive plan to accelerate the Company's growth and are designed to reduce costs, leverage economies of scale, maintain the highest level of quality and fund the Company's entire portfolio of new growth drivers.

On November 1, 2012, the Company initiated additional workforce reductions in connection with the 2012 Business Realignment Plan. Approximately 500 employees will be impacted by these reductions and the Company intends to provide support to those whose jobs have been eliminated. The Company expects to incur additional pre-tax charges of approximately $40 million to $60 million in connection with these additional workforce reductions. Including the actions taken in the third quarter of 2012, the 2012 Business Realignment Plan will reduce the Company's global workforce by approximately 5% and result in total charges of $150 million to $200 million through fiscal year 2013. This estimate is comprised of $90 million to $110 million of employee termination costs and $60 million to $80 million in accelerated depreciation, asset impairments and other costs. The Company estimates that approximately $100 million to $120 million of the charges will result in future cash expenditures.

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