Hill-Rom Holdings Inc. said it will eliminate about 350 jobs over the next two years as a cost-saving move after the maker of hospital equipment saw profit grow slower than expected.
Batesville-based Hill-Rom said the 350 positions are spread over its U.S. and European operations. The U.S. portion of the cuts are scheduled to be complete by the end of March. The European job cuts will play out over the next two years.
The cuts, which represent about 5 percent of Hill-Rom’s 6,800 workers, will save the company $30 million per year, boosting profit by about 35 cents per share.
It was not disclosed how many, if any, of the job cuts will occur in Indiana. Batesville is about 60 miles southeast of Indianapolis.
Hill-Rom said it would close a European manufacturing facility, reduce the capacity of its remaining plants in Europe and establish a shared-services center in Europe. In the U.S., Hill-Rom said it would “streamline” operations.
Over the past four years, Hill-Rom had already eliminated about 1,000 jobs. But with hospitals uncertain about their future under Obamacare, Congressional spending cuts and lower patient volumes, their spending on Hill-Rom’s hospital beds and other equipment slowed more than company executives expected.
“Economic uncertainty for our customers continues to impact the timing and the level of capital spending for our key product categories. The weak order rates in the last two quarters and the volatility over the past year reflect the challenges we continue to experience in our core market,” Hill-Rom CEO John Greisch told investors Thursday morning.
Hill-Rom reported earnings per share of 22 cents in the three months ended Dec. 31, down 44 percent from the same quarter of 2012. Revenue fell 8 percent from the previous year, to $393 million.
Hill-Rom lowered its full-year profit forecast because of the weaker results.
Shares of Hill-Rom tanked on the news, falling nearly 14 percent in Thursday morning trading, to $38.02 each.