Sunrise Medical Fires 170 in Consolidation
Sunrise Medical Inc. said it fired 170 employees and will fire 80 more as it consolidates its five North American home care divisions into a single unit.
The maker of hospital, home care and rehabilitation products also released fiscal second-quarter earnings that failed to meet analysts’ expectations.
The company said it will incur $4 million in costs over the next six quarters to complete the consolidation.
“They have been in a continual mode of consolidation of operations,” said Fred Toney, an analyst with Pacific Growth Equities. “This is one of the final steps.”
The Carlsbad-based company said it will combine its Quickie Designs, Jay Medical, DeVilbiss Health Care, Guardian Products and SunMed Service divisions into a single unit based in Jay’s Boulder, Colo., facility by mid-1998. The moves include combining three sales forces.
“Earnings were below our expectations in the second quarter due to pricing pressures in the U.S. home care market,” Sunrise Chairman Richard Chandler said in a statement.
Sunrise fired 170 employees, or 6% of its U.S. work force, to cut operating expenses, the company said. The other 80 jobs will be cut during the latest consolidation, which also will result in about 200 jobs being transferred to Boulder.
Most of the fired employees were temporary workers at the company’s plant in Fresno. About 500 workers remain at the facility, said Marcia Vaughn, a spokeswoman for Sunrise. The company employs 4,345 people worldwide, Vaughn said.
Sunrise shares fell one-eighth to 16 in trading of 130,300, more than double its three-month daily average of 55,900.
In June, Sunrise announced plans to consolidate its Bio Clinic and Joerns Healthcare units, which make products for nursing homes and hospitals.
“By reducing our organizational complexity, we will become a much easier company for our customers to do business with,” Chandler said.
The home care units, with annual sales of $300 million, account for 40% of Sunrise’s total revenue. Its products include wheelchairs and bath safety aids.
