Steris Announces Workforce Reduction Amid Restructuring Plans

Steris Corporation, a leading provider of medical equipment and sterilization services, has unveiled a restructuring plan aimed at enhancing profitability and operational efficiency. As part of this strategic overhaul, the company disclosed plans to lay off “less than 300 positions” across its global operations.

Rationale Behind the Workforce Reduction

The workforce reduction is a critical component of Steris’ broader restructuring efforts, which encompass product line re-evaluations, facility consolidations, and a strategic shift in the company’s healthcare surgical business in Europe. Additionally, Steris will conduct an impairment review for an internally developed X-ray accelerator.

In a statement filed with the Securities and Exchange Commission, Steris explained, “The restructuring includes product line re-evaluations, facility consolidations, a strategy shift in the company’s healthcare surgical business in Europe, and an impairment review for an X-ray accelerator that was internally developed.”

Financial Implications and Cost-Saving Projections

Steris anticipates that the restructuring program will generate annual savings of approximately $25 million, with the majority of the benefits expected to materialize in fiscal 2026 and beyond. The company recorded pre-tax expenses of $44.4 million related to the restructuring in its fiscal year 2024, which ended on March 31.

Furthermore, Steris expects to incur additional restructuring expenses of around $55.3 million, comprising severance and other compensation costs ($36.2 million), lease and contract termination costs ($15.3 million), and accelerated depreciation and amortization ($3.8 million).

Anticipated Timeline and Workforce Impact

Steris aims to complete the restructuring process by the end of its fiscal 2025, which will conclude early next year. The company employed more than 18,000 people worldwide in its fiscal 2024, according to the filing.

While the workforce reduction is a difficult decision, Steris remains committed to pursuing operational excellence and long-term sustainability. As stated by a company representative, “The restructuring is necessary to ensure our continued competitiveness and position us for future growth.”

Industry Context and Future Outlook

Steris’ restructuring efforts and workforce reduction align with a broader trend observed in the medtech industry, where companies are actively seeking to streamline operations and reduce costs to navigate challenging economic conditions. The company’s strategic initiatives are designed to fortify its core healthcare, pharmaceutical, and medtech businesses, following the recent divestiture of its dental business to private equity firm Peak Rock Capital for $787.5 million.

As the restructuring unfolds, Steris remains focused on delivering innovative solutions and maintaining its position as a trusted partner in the healthcare sector. The company’s leadership expressed confidence in the long-term benefits of the restructuring, emphasizing its commitment to operational excellence and sustainable growth.

Pictured: A Steris Vividimage 4K surgical display in an operating room.