Embecta began a restructuring plan in its fiscal second quarter, the company announced on Friday, its second organizational change since November. The cuts are intended to “streamline the organization and optimize resources,” and are separate from a restructuring related to the company discontinuing its insulin patch-pump program, which was announced about six months ago.
Embecta did not confirm with MedTech Dive the number of people who will be affected by the restructuring announced Friday.
CFO Jake Elguicze told investors on an earnings call that the company has been looking for ways to be more efficient since it spun out of BD in 2022.
“Over the last several years, as we've sort of been separating from our former parent and standing ourselves up very, very intentionally, we did not make any material changes to the organization,” Elguicze said. “And we've always talked about how we would look for opportunities to continue to sort of right-size the organization to continue to take cost out.”
As a result of the restructuring, Embecta expects pretax savings between $7 million and $8 million during the second half of its fiscal year. Most of the changes are in selling, general and administrative expenses, the CFO added.
Meanwhile, the company’s plan to discontinue its insulin patch pump program is “substantially complete,” CEO Dev Kurdikar said on the earnings call. In December, Embecta announced it would cut 125 jobs in Massachusetts related to winding down that program.
That restructuring was larger, with expected annual pre-tax savings of $60 million to $65 million.
Tariff update
Embecta expects a $3 million impact to its 2025 margins due to tariffs, and potentially an $8 million to $9 million impact in 2026, Elguicze said. The CFO said Embecta’s better-than-expected second quarter performance, the recently announced restructuring plan and shifts in foreign exchange rates would help the company to absorb the impact of tariffs.
That forecast came before the U.S. and China reached a 90-day agreement to cut levies, with the U.S. now charging 30% tariffs on imports from China.
Embecta has three main manufacturing facilities in Nebraska, Ireland and China, Elguicze said. The company lowered its revenue expectations and maintained its forecast for adjusted earnings per share in 2025.
