Dear colleagues,
Over decades, our people have created some of the world’s most meaningful innovations that have improved millions of patients’ lives and cemented this company’s standing as a healthcare technology powerhouse. Innovation powers Medtronic, and as stewards of the Mission, we must continually look for ways to fuel the projects that will help alleviate pain, restore health, and extend life for more people in more places.
Today, I’m writing to share an update on decisions we are making to position our company for durable growth into the future.
Impacts to our team
As you know, we’ve been working to reduce costs throughout FY23 to minimize potential impacts to our people. We’ve limited travel, slowed hiring, offered a U.S. voluntary early retirement program (VERP), and more. While these measures have garnered savings, we do still expect to reduce our full-time workforce in the coming months. Individual employee notifications will begin today and will continue in the coming weeks and months as timelines across the globe will differ. The impact will vary by team, region, and country. As always, we comply with all local and national regulations, including consultations with works councils, where applicable.
Knowing that these decisions will impact the livelihood of our friends and teammates weighs heavily on me. Our full ExCom and I are endlessly thankful for the immense impact that all our employees have made to advance our work improving human welfare around the world. As our Mission dictates, we are taking great care to treat all impacted employees with the dignity and respect they deserve. We will follow fair, consistent processes and provide comprehensive transitional resources during this time.
It will be hard to see our talented colleagues and friends depart. At the same time, these actions will help create a more resilient organization and enable Medtronic to deliver on our Mission for years to come.
How we got here
In recent quarters, macroeconomic factors like inflation and the strong U.S. dollar have negatively impacted our margins and contributed to lower profitability for the company. We’ve also had lower than expected revenue growth, driven in part by supply chain challenges and the delay of a few anticipated product launches that were expected to be significant growth drivers.
As a result, we have a focused and comprehensive effort underway to realign our cost structure with our revenue and margins. Businesses, functions, and regions are critically evaluating where to make difficult and necessary tradeoffs to align our resources and ensure we’re protecting critical investment in the technology that holds the most promise and potential to benefit patient lives.
Our enduring Mission propelling us forward
There is an immense and exciting opportunity ahead of us fueled by our deep expertise, diverse businesses and robust pipeline. We sit at the nexus of where technology and healthcare intersect, and innovation is the singular path forward into a future where we can fulfill our purpose and serve the millions of customers and patients who are counting on us.
Everything we are doing is in relentless support of innovation—it’s the lifeblood of our company, and we must take action to protect it. The best way to forge a durable future in today’s dynamic environment is by creating a leaner, more disciplined way of operating. In so doing, we will be better positioned to manage our resources to accelerate innovation, leverage our scale, and execute with excellence.
And by keeping the Mission as our North Star, I’m confident that the best days are ahead of us. I know that we will work together to reach new heights, delivering groundbreaking solutions that will alleviate pain, restore health, and extend life for two people every second—and many, many more.
In closing, I want to share my heartfelt gratitude for the contributions of every one of our employees who have given so much to this company and our greater purpose. Thank you for all that you do to serve our Mission each day.
Sincerely,
Geoff Martha
Chairman & CEO