Medical giant Stryker cuts 1,170 jobs, citing ObamaCare
Medical supply giant Stryker is the latest company to announce job cuts in anticipation of coming costs associated with ObamaCare, even though the man who inherited a fortune from the company's founder is a fan.
The company will cut 1,170 jobs, or five percent of its worldwide workforce, despite the fact that the founder's grandson was one of the largest contributors to President Obama’s re-election campaign. Medical tech scion Jon Stryker, whose net worth is currently estimated at $1.2 billion, contributed $2 million to the Priorities USA Action super PAC and has given $66,000 in contributions to Obama and the Democratic Party. Stryker does not run the company.
A "medical device excise tax" included in the mandate imposes a 2.3 percent levy on medical device manufacturers and suppliers, which critics say will raise prices on everything from pacemakers to prosthetics to stents. Companies will be required to pay the tax regardless if they have a profit or loss for the year. The tax is estimated to cost the medical device industry $20 billion.
House Republicans tried to have the tax repealed, drafting a bill called the Protect Medical Innovation Act, but the Democrat-controlled Senate has blocked the measure.
“The targeted reductions and other restructuring activities are being initiated to provide efficiencies and realign resources in advance of the new Medical Device Excise Tax scheduled to begin in 2013, as well as to allow for continued investment in strategic areas and drive growth despite the ongoing challenging economic environment and market slowdown in elective procedures,” Stryker spokeswoman Yin Becker told FoxNews.com. “The reductions and restructuring activities are expected to be substantially complete by the end of 2012.”
Executives for Stryker have placed the blame squarely on the coming tax ever since it gained more steam in Washington.
"Here we are, one of the greatest industries in the country, and we're staring down on Jan. 1, 2013 and the addition of a 2.3 percent excise tax, while meanwhile on the other side all the discussion in Washington is about creating jobs," Stryker President and CEO Stephen McMillian said during a national conference of medical device manufacturers in Washington, D.C. last September.
Positions within the company were eliminated altogether after the announcement and have since contracted out many of their current roster of employees to keep costs down, an employee with Stryker, who spoke to FoxNews.com under the condition of anonymity, said.
“They really trimmed the fat with the last layoffs in 2009 and the year after which is probably why we are finally on budget for the first time since 1999,” the employee added.
Jon Stryker has been active in politics before the recent election; he contributing millions to help Democratic candidates in his home state of Michigan. He also has given nearly $250 million of his personal wealth to groups supporting gay rights and the conservation of apes, which led to a newly found species being named after him. In 2010, the discovered Myanmar Snub-nosed monkey was named Rhinopithecus strykeri by the research teams that were funded by Stryker’s Arcus Foundation.