US medical technology company Medtronic has said its site at Mervue in Galway, which currently manufactures ventilators, will continue to be an important facility for the company.
Announcing its latest set of financial results, Medtronic said it would exit ventilator production which it described as an "increasingly unprofitable" product line.
The company said it expects the decision will lead to around 40 redundancies. The 400 staff based at the plant in Mervue were informed of the decision at a meeting this afternoon.
The company said efforts will be made to redeploy staff impacted by today's announcement to other roles.
In other cases, it is understood an early retirement scheme will be offered. SIPTU says it is concerned at the development and will write to the company seeking engagement on the terms of any redundancy package.
Medtronic told RTÉ News that since 2020, its product lines at the site have diversified and that it will continue to look for new investment opportunities for the facility.
"Ireland will remain a significant location for Medtronic well into the future," a spokesperson said.
"We have a strong and long-standing presence here, celebrating 40 years in 2022. Ireland is our corporate headquarters, and a significant manufacturing and R&D hub," Medtronic said.
The company employs more than 4,000 people in Ireland with 500 of them engaged in R&D roles.
Medtronic said it will continue to honor existing ventilator contracts to serve the needs of its customers and their patients, and expects that existing manufacturers, who today account for the majority of the market, can meet customer demand for new ventilators moving forward.
Meanwhile, Medtronic today raised annual profit forecast for the third time this fiscal, banking on higher demand for its heart and diabetes devices.
Demand for medical devices has picked up pace as non-urgent procedures, which were deferred during the pandemic, recovered in the past year with easing hospital staff shortages and people becoming regular with check-ups.
Medtronic expects adjusted profit for the fiscal 2024 to be between $5.19 and $5.21 per share, compared with its previous forecast range of $5.13 and $5.19 per share.
Sales at the company's heart devices unit, its biggest revenue driver, increased 6.1% to $2.93 billion, compared to analysts' estimate of $2.89 billion.
Sales at the diabetes unit were $640m, also above analysts' estimate of $601.9m.
Medtronic also said it has decided to exit its unprofitable ventilator product line within its patient monitoring and respiratory interventions (PMRI) business.
CEO Geoff Martha had said in November the company was planning to spin off its PMRI business, which is a part of its medical surgical portfolio, by the first half of the next fiscal year.
Medtronic said today it would combine the remaining businesses within PMRI operating units into a single unit.
The company also said these operational changes would eliminate the position of executive vice president and president of medical surgical portfolio, currently held by Robert White. White would leave the company effective April 26.
Medtronic's revenue for the third quarter rose 4.7% to $8.09 billion. Analysts on average estimated $7.95 billion, according to LSEG data.
The company posted adjusted profit of $1.30 per share for the quarter, compared with analysts' estimate of $1.26 per share.
Additional reporting: Pat McGrath
