Surgalign (Nasdaq:SRGA) today announced a board-approved corporate restructuring plan that includes layoffs.
The Deerfield, Illinois–based spine surgery tech company did not disclose how many jobs may be cut amid the planned streamlining and brand and product portfolio rationalization initiatives. As of Dec. 31, 2021, Surgalign had 231 employees — 70 of them outside the U.S., according to its most recent annual report.
The company estimates it will save roughly $30–35 million compared to 2022.
In addition to approving the restructuring plans yesterday, Surgalign’s board gave management the green light to explore other cost-saving avenues. Future moves could include paring down, selling or exiting certain aspects of its business, both domestically and abroad.
The goal is to refocus the company on R&D and commercializing products that align with its core strategy.
“We believe these programs will enable us to generate growth in areas we are focused on, enhance gross margins and lower expenses, and over time, improve our financial position by freeing up resources to invest in areas we believe hold the greatest promise,” CEO Terry Rich said in a news release.
“Implementation of these programs will be dependent on the outcome of financing initiatives currently underway.”
Surgalign expects $3–3.5 million in employee-related severance costs and $2.5 –3.5 million in other exit and disposal costs during Q4 2022 and Q1 2023. In total, the restructuring will cost $5.5 –7.0 million.
Investors reacted by sending SRGA shares down more than 4%, to $1.58 apiece, by the close of trading today. MassDevice‘s MedTech 100 Index, which includes stocks of the world’s largest medical device companies, was down slightly.