SKANEATELES FALLS — [Last month’s] announcement by Welch Allyn that it will cut 10 percent of its work force in the next three years sent shockwaves throughout Skaneateles, where the company has its global headquarters and employs 1,300 people. While companywide restructuring will have a significant impact in Skaneateles, it should be seen as a positive and not a negative event in the long term, the company contends.

When asked if the Skaneateles Falls manufacturing plant or the headquarters operations are in danger of closing or moving out of the local community, Matt Chadderdon, vice president for corporate communications, says, “Far from it.” The company’s plan to transfer production of more high-tech products to Skaneateles, in fact, “really strengthens our Skaneateles presence,” he says.

Welch Allyn’s original announcement, issued Sept. 11, stated it would begin a companywide restructuring program during the next three years that would necessitate a 10 percent reduction in its work force. The decision was made to “proactively prepare the company to address the new onerous U.S. Medical Device Tax scheduled to begin in 2012 as mandated in the Affordable Care Act, as well as other significant changes driven by health-care reform and market dynamics,” the company said in a news release.

The Affordable Care Act, often dubbed “Obamacare,” contains a 2.3 percent excise tax on the sale or lease of all medical devices made in the U.S., which will cost Welch Allyn million of dollars every year.

The company restructuring will establish three new product-development and technology centers in Skaneateles Falls, Beaverton, Ore., and Singapore, and create a new global finance shared-service center in Tijuana, Mexico. It will also consolidate its North American manufacturing and related support functions at Welch Allyn’s largest facilities in Skaneateles Falls and Tijuana.

What this means for Skaneateles is that some employees will lose their jobs that are being transferred to a different location; some workers will be retrained to work new jobs being brought into Skaneateles; and some employees from other plants in the U.S. will be moved to Skaneateles.

Specifically, Welch Allyn will close part of its Beaverton, Ore. manufacturing plant — cutting 160 jobs — and ship production to Skaneateles Falls, where employees will be retrained to handle the new jobs. These jobs include the production of bio-signs monitoring systems, patient-monitoring systems, and low acuity vital-signs systems. Some of the Oregon employees will be offered jobs in Skaneateles. 

“These are the more high-tech knowledge products,” Chadderdon says. “That’s part of our strategy — to increase the capabilities here [in Skaneateles] and continue to make this a high-technology center for new products.”

Some of the work from the Skaneateles Falls plant, such as producing thermometer probes and medical lamps, will be moved to Welch Allyn’s Tijuana plant. “that allows us to continue with the more high-tech products [in Skaneateles] and makes room for us to incorporate and absorb the new products we’ll be getting from Beaverton,” Chadderdon explains.

Also moving to Tijuana will be “less than a dozen” of what the company called “back office” or “accounting-related” positions, such as accounts payable and receivable, credit and collection, and ledger maintenance, he adds.

The changes affecting Welch Allyn’s Skaneateles locations will cause job losses here. The company is expecting 45 involuntary layoffs and an as-yet-unknown number of voluntary separation buyouts, Chadderdon says. Employees have 45 days to consider whether to accept a buyout, so the company will not have an accurate voluntary separation figure for a while, despite what some local news outlets have reported, he says. 

Welch Allyn said in its Sept. 11 announcement that it will offer all affected employees a “generous” separation package, including outplacement assistance from one of the world’s leading outplacement firms. It also will offer a continuing-education assistance benefit that will reimburse up to $4,000 of the cost of education for the successful completion of coursework through an accredited institution and/or for the successful achievement of a professional certification designation offered by a recognized organization. This benefit will be available to these employees for up to 12 months after separation. 

“Our plan is well thought out and tied to the rapidly changing healthcare market, and in keeping with our history of making sure we treat our employees fairly and with the highest level of respect. We are confident we will emerge from this restructuring stronger than ever,” Welch Allyn President and CEO Steve Meyer said in a press release.          

This article is drawn and edited from the Sept. 19-25 issue of the Skaneateles Press, an Eagle Newspapers publication. Jason Emerson is the editor of the Skaneateles Press. Contact him at editor@skaneatelespress.com