Smith & Nephew last week blamed 63 layoffs in Memphis on rising federal taxes, but the company's CEO recanted Thursday, saying the job cuts have nothing to do with the new the health care law that taxes medical device makers.
Smith & Nephew CEO Olivier Bohuon told industry analysts Thursday that Memphis newspapers and broadcasters last week incorrectly linked the company's 100 job cuts worldwide to the medical device tax.
A company spokesman last week told The Commercial Appeal that layoffs would save money and help Smith & Nephew shoulder the cost of the new tax. But in the conference call Thursday with Wall Street analysts, London-based Bohuon insisted the media got the story wrong.
"(The layoffs were) just a mix of things in the environment that we have seen a year ago, having driven us to make the changes we are making and this is why it is what it is," Bohuon said, according to a transcript of the call. "So I mean, the 63 people have nothing to do with the Obamacare per se."
Sixty-three lost their jobs in Memphis last week, about 20 were laid off in Andover, Mass. and "something like 12 (were laid off) in Europe," Bohuon told analysts. The exact number and location of the layoffs were not revealed by the company last week.
When contacted about the layoffs last week, Smith & Nephew spokesman Joe Metzger issued this statement, "The nearly $30 billion tax on medical devices that took effect Jan. 1, 2013 has impacted a number of companies across the U.S. Smith & Nephew is not immune from this added expense burden.
"Unfortunately, and in order to absorb this cost burden into our business, this has meant less than 100 positions have been made redundant across various departmental functions in our Tennessee and Massachusetts sites."
This message was reported by The Commercial Appeal and other news agencies in Memphis. But when Bohuon answered a question about these news stories from Morgan Stanley analyst Michael K. Jungling Thursday, the message was quite different.
Bohuon noted that "what folks, TV in Memphis or the Memphis Time (sic) has written is just wrong."
The medical device tax reason for the layoffs rang loudly through the press, reported by The Huffington Post, Fox News, industry journals, CBS News, political journals and others.
Smith & Nephew said last year it would layoff 7 percent of its entire workforce and laid off 80 here in 2011.
A request for a response from the company was not immediately answered.