Cook Medical cutting 500 jobs as part of strategic refocusing
Cook Medical, the Bloomington-based maker of medical devices, said Monday it will cut 500 jobs, or about 4% of its global workforce, as part of a new strategic plan to refocus efforts on product innovation.
The news was uncommon for family-owned Cook, which rarely has layoffs and prides itself on its positive relations with employees.
“This will be the first of this size,” company president Pete Yonkman told IBJ. “And it’s really a reflection of how much the world has changed.”
Cook Medical said the layoffs will affect sales representatives and other “customer-facing teams,” along with internal functions and support structures. No hourly workers in manufacturing or distribution centers will be laid off, due to high demand for products.
The layoffs will affect about 223 workers in the U.S., including about 123 in Indiana. Of that, about 85 jobs in Bloomington will be cut, and a smaller, unspecified number in the Indianapolis area. Cook said it would not cut any jobs at its new, $15 million medical-device manufacturing facility at 38th Street and Sheridan Avenue that it announced in 2020.
“We added that for extra capacity for our manufacturing,” Yonkman said. “So again, we’ll continue to add there.”
Cook announced the layoff to all 10,270 employees in an email at 1 p.m. Monday. The company instructed employees to look for a follow-up email between 8 a.m. and 9 a.m. Eastern time Tuesday, letting them know if they are impacted, and outlining next steps for a conversation with a manager and the human resources department.
“We want to make sure that you are in a comfortable, private location for these conversations,” Monday’s email said. “We are asking all hybrid employees and onsite employees who are capable of working from home to do so for the remainder of the week.”
Cook told employees it needs to lead the industry by “relentlessly delivering new products and services.” It said its new strategic plan, which it began formulating late last year through extensive conversations with customers, employees and leadership teams, “maps a clear pathway to reach our goals.”
Yonkman said the company has had more than 70 breakthroughs in new procedures and techniques. “So we are really looking to get back to that strategy of really just relentlessly delivering new innovation for our customers,” he added. “So it’s essentially a product innovation strategy.”
Employees who are laid off will receive severance packages ranging from 10 weeks to nine months, depending on the length of service and position.
Yonkman said the new strategic plan would help Cook stay ahead of changes hurtling through the industry.
“I would not call it a sweeping overhaul,” he said. “What I would call it is a refocusing of our efforts on core competencies, and what we’re really good at, which is delivering innovation, particularly in the device space, and somewhat in the biologics space.”
In recent years, Cook has been shedding non-core operations. In 2017, it sold its contract drug manufacturing operation, called Cook Pharmica, to New Jersey-based Catalent Inc. for $950 million. In 2019, it spun off a biotech unit called Sexton Biotechnologies, from its Indianapolis-based medical-technology incubator unit. Last year, it shut the incubator division, called Cook Regentec, completely and offered employees jobs in other operations.
The company’s parent, Cook Group, is the third-largest, privately owned company in Indiana by revenue. The company posted revenue of $2.36 billion in 2022, down 5% from the previous year.
Cook Group was founded in 1963 by Bill and Gayle Cook. They invested $1,500 in plastic tubing, a blowtorch and a soldering iron and started making medical catheters in their apartment. Today the company makes thousands of devices, from disposable needles and catheters to highly specialized equipment for advanced medical procedures. Bill Cook, the company’s longtime head, died in 2011 at the age of 80.