Memphis-based medical company Smith & Nephew laid off just under 100 employees at its offices in Memphis and Massachusetts, blaming the layoffs on taxes resulting from Obamacare.
Inside sources told FOX13 News the layoffs at Smith & Nephew in Memphis went on through most of Thursday morning and afternoon. These sources say employees who were laid off were escorted out of the building immediately.
The company says it laid off less than 100 employees between its Tennessee and Massachusetts offices. Smith & Nephew released a statement saying the reason for the layoffs, saying, "The nearly $30 billion tax on medical devices that took effect Jan. 1, 2013, has impacted a number of companies across the U.S."
READ: Violations of Foreign Corrupt Practices Act by Smith & Nephew
READ: February 2012 DOJ letter concerning Smith & Nephew
Smith & Nephew added that they are not immune from the multi-billion tax on medical devices.
"Unfortunately, and in order to absorb this cost burden into our business, this has meant less than 100 positions have been made redundant across various departmental functions in our Tennessee and Massachusetts sites," the statement read. "The company is providing the affected employees with a comprehensive severance package and outplacement support."
FOX13 News also found documents from a 2012 ruling in a case between Smith & Nephew and the U.S. Security and Exchange Commission. The company received a multi-million dollar fine after a bribery investigation revealed that starting in 1997, it used off-the-books money from its distributor in Greece for cash incentives to encourage providers to buy smith & nephew products.
FOX13 News asked a Smith & Nephew representative, on top of the medical device tax, how the SEC fine of $16.8 million does not impact the recent layoffs. The spokesman simply replied, "The Med Device tax is a yearly tax."
The company also saw an eight-percent decrease in its recent third quarter profits. Smith & Nephew took a hit after a hip replacement recall in June 2012.
As for the layoffs, Smith & Nephew says they are "providing the affected employees with a comprehensive severance package and outplacement support."
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