Becton Dickinson plans area layoffs Company feels effects of squeezes by HMOs and hospital chains

November 14, 1996|By Sean Somerville | Sean Somerville,SUN STAFF

Becton Dickinson & Co. Inc., a medical supply company that employs about 1,700 people in two facilities in Sparks and Hunt Valley, will cut an unknown number of Baltimore County jobs.

Vince Forlenza, the president of Becton Dickinson Microbiology Systems (BDMS), told employees in a Nov. 1 memo that the company faces "continuing consolidation and spending reductions in the health care industry."

"Consequently, spending will be reduced and, unfortunately, a number of jobs will be eliminated," Forlenza wrote. "I expect this process to be completed in about a month."

A spokesman would not provide details about the company's plans, which have not yet been disclosed to workers.

BDMS, which employs all of Becton Dickinson's Baltimore workers, has about 2,500 employees worldwide. Among the division's products is diagnostic equipment to detect strep throat and tuberculosis. Becton Dickinson & Co. Inc. is based in Franklin Lakes, N.J.

John M. Eade, a New York-based analyst who follows Becton Dickinson for Argus Research, said the company is responding to intense pressure from health maintenance organizations and hospital chains.

In many cases, HMOs are pooling their buying power and are able to demand lower prices. In others, hospital chains are buying one piece of equipment for several hospitals. "The service providers -- hospitals and HMOs -- are really able to squeeze the device manufacturers," Eade said.

Becton Dickinson last week reported that net income for the fiscal year that ended Sept. 30 was $283 million, up 13 percent from the previous year.

In the memo, Forlenza said he was responding to rumors about "reorganization and layoffs." He said consolidation and spending reductions "have resulted in our not meeting our own expectations or the corporation's expectations for this business.

"Based on a market analysis we've recently completed, it looks like these trends will continue, translating into low sales growth for our business" through next year. A staff review aimed at building "a stronger, more efficient, more competitive business involves adjusting our systems, processes and staffs to reflect the consolidation of several Baltimore divisions."

Saying that BDMS will grow its business by employing strategies that include "partnering and acquisitions," Forlenza wrote, "We can and will emerge from these market challenges a much stronger competitor."

Pub Date: 11/14/96

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