Cardinal Health executives said Thursday that the company has laid off employees to help offset hundreds of millions of dollars in charges due to President Donald Trump’s tariff policies.
The company forecast a range of $200 million to $300 million in costs due to tariffs in its fiscal year 2026, which historically has begun in July. Cardinal Health has implemented “aggressive” mitigation efforts, particularly within its global medical products and distribution business, such as increasing manufacturing, diversifying suppliers away from high-risk jurisdictions, deploying artificial intelligence in tariff planning and compliance, and reducing its headcount.
CEO Jason Hollar, speaking on the company’s fiscal third-quarter earnings call, said the mitigation strategies have helped the company avoid several hundred million dollars of exposure. Still, Cardinal Health expects a significant hit.
“Based on today's tariffs, we would still anticipate roughly $200 million to $300 million of remaining gross tariff costs in fiscal '26, before further mitigation,” Hollar said. “We anticipate mitigating the majority of these costs through continued operational actions and price adjustments, which we are already working on with our customers.”
Cardinal Health did not return MedTech Dive’s request for comment on how many people were laid off, where in the company the cuts were made and whether more layoffs will be considered if additional costs arise.
Hollar said the layoffs took place in the company’s fiscal third quarter.
Healthcare companies have detailed expected tariff costs throughout the earnings season. In the medtech industry, companies like Johnson & Johnson, Abbott, Boston Scientific and Stryker have forecast hundreds of millions of dollars in charges. However, multiple companies have either maintained or raised guidance.
Stryker was among the companies to lower its earnings guidance due to the tariffs, though it increased its organic sales forecast for the year. Meanwhile, GE Healthcare slashed its profit outlook earlier this week.
Boston Scientific executives said the majority of its $200 million in forecasted tariff costs is expected to come in the second half of the year. Cardinal Health appears to expect a similar effect.
Cardinal Health CFO Aaron Alt told investors that there will be some impact in the company’s fiscal fourth quarter from the earlier round of tariffs between the U.S., Mexico and Canada; however, “most of that early impact will be offset in the quarter, or will be recognized in future periods when the related product is sold.”
Alt said that the company is confident it can navigate changes in the healthcare industry, including the Trump administration’s pharmaceuticals investigation that could result in industrywide tariffs.
Cardinal Health reported nearly $55 billion in total revenue, flat year over year. Its pharmaceutical and specialty solutions segment brought in $50.4 billion, while the global medical products and distribution business brought in $3.2 billion.
The company will hold an investor day on June 12 to discuss the business in more detail.
The healthcare industry is adapting to the start-and-stop nature of tariffs under Trump. Cardinal Health said its forecast is based on where things currently stand.
“This is absolutely based upon what we understand literally today,” Hollar said. “As everything evolves, we've got a great process and model set up to be able to manage this [in] real time.”
