Market Conditions Forcing Layoffs at DePuy

More proof the orthopedic industry is still mired in recession: DePuy Orthopaedics Inc. is laying off a portion of its workforce.

Granted, DePuy has had its share of troubles lately, namely the costly recall of its ASR XL Acetabular System and ASR Hip Resurfacing System. The company recalled both products in August 2010 due to the unusually high number of patients who needed a second hip replacement; the move has spawned more than 2,000 lawsuits in state and federal court (in the United States) since it was announced, and could end up costing Johnson & Johnson (DePuy’s parent corporation) billions of dollars.

Several weeks ago, DePuy executives announced the company would lay off a “minimal number of employees” throughout its global operations. No exact figures were given, but a spokeswoman said some cuts could occur at the company’s headquarters in Warsaw, Ind., which employs a total of 1,200 workers. All displaced employees will receive severance packages and outplacement support, the spokeswoman added.

In a statement, the company claimed it “is taking steps to carefully prioritize investments, eliminate ones that do not offer a good return, and ensure that our workforce is appropriately sized and structured to address the impacts of challenging economic conditions in the orthopedic market and support high growth areas.”

One of those steps included eliminating the company’s aviation department. V. Richard Miller, owner of Warsaw-based Image Air Charter LLC, an air charter firm, claimed DePuy nixed the purchase of a Warsaw Municipal Airport hangar that it temporarily had been leasing. He told the Times-Union at least nine people worked in the company’s aviation department, including six pilots.