Quote:ResMed’s 2024 fiscal year kicks off with plans to lay off 5% of workers
As it continues to take advantage of the gaping hole left in the CPAP machine market by competitor Philips’ ongoing respiratory recall troubles, ResMed is still fine-tuning its long-term growth strategy—a process that’s now resulting in some short-term shrinkage.
During a call with investors on Thursday afternoon to discuss ResMed’s financial results for the first quarter of its 2024 fiscal year, CEO Mick Farrell said the actions that the company is taking to “accelerate profitable growth across ResMed and to power our long-term success” have led to a 5% reduction in its global workforce.
“We have stopped some projects that were not working out as well as we thought. We’ve increased investment in areas that we believe will be pivotal to long-term success, such as our digital health tech investments, as well as focused hardware and software development, creating the smallest, the quietest, the most comfortable, the most connected and the most intelligent healthcare solutions in the market,” Farrell said.
“These changes have impacted some of our teams,” he continued. “Decisions like this that impact people are never easy. However, we know that we are doing the right thing, and we’re doing the right thing to accelerate our growth and to refocus on our long-term mission. I feel more strongly than ever that we are well positioned with an incredibly long runway of profitable growth and value creation for all of our stakeholders as we move forward.”
ResMed CEO on Philips' return to CPAP market: 'Game on'
Farrell didn’t disclose the exact number of employees affected by the workforce reduction, which began earlier this week. However, as of ResMed’s most recent annual report, the company counted more than 10,140 employees, meaning the layoffs could impact at least 500 workers.
Brett Sandercock, the devicemaker’s CFO, said on Thursday’s call that the restructuring is on track to be completed during the second quarter of ResMed’s fiscal 2024.
When asked later whether additional restructuring could be in ResMed’s future, Farrell suggested that this week’s actions represent the biggest chunk of changes for now.
“There are some changes I’m looking at in the operating model, in roles and responsibilities, and a focus on a more product-led and brand-led company that will come over time, but they’re not massive restructures,” he said. “That restructure is done, and we’re now focused on moving forward.”
ResMed stock slides to near 2-year low despite 18% annual revenue rise
The layoff announcement came as ResMed reported a quarter of strong growth. For the first quarter of its fiscal 2024, which began July 1, the company took in revenues of more than $1.1 billion, up 16% year over year, per Thursday’s earnings report.
Its net profits rose, too, despite taking hits from incremental expenses tied to the recent acquisition of German software developer Medifox Dan, from increased component and manufacturing costs and from an $8 million provision it took to prepare for the costs of a recently launched corrective action for some of its Astral ventilators. Its quarterly net income weighed in at more than $219 million, up 4% from the $210.5 million profit it recorded a year prior.
Still, thanks to those expenses, the company’s gross margin shrank by 250 basis points—down to 54.4% from nearly 57% a year ago. That led its stock price to continue its steady dip downward: After slipping below the $200 mark for the first time in a year upon the release of its full-year 2023 results in August, the stock has since fallen even further below that threshold, spending much of the last two months below $150 and briefly dipping in after-hours trading Thursday to a three-year low of $124.
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[News] RESMED CHANGES COMING?
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RESMED CHANGES COMING?
FYI:
"The object in life is not to be on the side of the majority, but to escape finding oneself in the ranks of the insane." -- Marcus Aurelius
12-30-2023, 10:02 AM
RE: RESMED CHANGES COMING?
It's hard to hear about people getting laid off when a corporation is profitable. I've always believed that if a company makes layoffs, a.k.a restructures, the CEO and their direct staff should lose their bonus and stock incentives. This is coming from someone who works for a fortune 100 company.
That said I saw a video on YouTube from CPAPReviews that there is a new ResMed mask and possibly travel machine coming in 2024. I think that the F&P solo with their self adjusting head gear is going to be hard to beat.
12-30-2023, 10:19 AM
RE: RESMED CHANGES COMING?
This is one of the dangers of unexpected demand when a competitor falters. The sudden shift shows where the gaps are in a companies execution strategy. They began making executive management changes last summer and it continues as they change their operating model to deal with the cost of goods increases they have to manage. They seem like a smart bunch and market pundits still recommend them as a “BUY”, which is a good sign.
If you are interested in reading more, the following link gives the transcript of their Q1 2024 earnings call. https://finance.yahoo.com/news/resmed-in...22195.html
12-30-2023, 10:55 AM
RE: RESMED CHANGES COMING?
I remember in early 2022 when Philips decided their priority should be capitalization of data collected by their devices to improve corporate profits and also help improve delivery of service by health providers and suppliers (DME). At the same time they encrypted the data collected by their Dreamstation devices. You may recall this ALERT thread https://www.apneaboard.com/forums/Thread...ge-ACT-NOW All of this was on the cusp of their device recall as it was moving from a voluntary correction to a full-fledged corporate disaster that rocked the industry worldwide.
In Resmed's current Earnings Call we see Resmed's vision on the use of data is quite different: Quote:Insider Monkey Transcripts I at least find that vision more reassuring, and more inclusive to the consumer sector. I would however like to see more emphasis and recognition of the role of patients in managing their own therapy, but at least it is there. I don't see the 5% force reduction as significant in scope or having much impact on the core business, and it's a common to see a minor realignment of workforce occur with consolation of focus in core business priorities. It looks like the rollout of the Airsense 11 and certainly the Aircurve 11 has been a lot slower than they wanted, and the Airsense/Aircurve 10 series is still a major part of the business. One aspect of Resmed's data utilization shows a continued over-emphasis on "compliance" rather than outcome: Quote:This quarter, we started rolling out a digital product in our US market called Compliance Coach. A part of Resmed's business I was unaware of: Quote:In addition, we have investments in other second line therapies, including pharmaceuticals and hypoglossal nerve stem technology. The report is worth reading, but is a bit long.
Sleeprider
Apnea Board Moderator www.ApneaBoard.com ____________________________________________ Download OSCAR Software Soft Cervical Collar Optimizing Therapy Organize your OSCAR Charts Attaching Files Mask Primer How To Deal With Equipment Supplier INFORMATION ON APNEA BOARD FORUMS OR ON APNEABOARD.COM SHOULD NOT BE CONSIDERED AS MEDICAL ADVICE. ALWAYS SEEK THE ADVICE OF A PHYSICIAN BEFORE SEEKING TREATMENT FOR MEDICAL CONDITIONS, INCLUDING SLEEP APNEA. INFORMATION POSTED ON THE APNEA BOARD WEB SITE AND FORUMS ARE PERSONAL OPINION ONLY AND NOT NECESSARILY A STATEMENT OF FACT.
12-30-2023, 11:05 AM
(This post was last modified: 12-30-2023, 11:06 AM by SarcasticDave94.
Edit Reason: Edit
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RE: RESMED CHANGES COMING?
If there's any value in how things like business models feel, ResMed feels like it's got a much better plan to succeed. I think it reflects on how they manage and even down to the products they sell. PR is basically the opposite IMO, feels more like get rich quick.
INFORMATION ON APNEA BOARD FORUMS OR ON APNEABOARD.COM SHOULD NOT BE CONSIDERED MEDICAL ADVICE. ALWAYS SEEK THE ADVICE OF A PHYSICIAN BEFORE SEEKING TREATMENT FOR MEDICAL CONDITIONS, INCLUDING SLEEP APNEA. INFORMATION POSTED ON THE APNEA BOARD WEBSITE AND FORUMS ARE PERSONAL OPINION ONLY AND NOT NECESSARILY A STATEMENT OF FACT.
12-30-2023, 11:54 AM
RE: RESMED CHANGES COMING?
Do you really think so? I don't understand how anyone with hair too short for a ponytail can even keep that type of headgear in place.
Paula
"If I quit now, I will soon be back to where I started. And when I started I was desperately wishing to be where I am now."
12-30-2023, 12:31 PM
RE: RESMED CHANGES COMING?
My olive drab boonie hat stays on just fine.
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INFORMATION ON APNEA BOARD FORUMS OR ON APNEABOARD.COM SHOULD NOT BE CONSIDERED MEDICAL ADVICE. ALWAYS SEEK THE ADVICE OF A PHYSICIAN BEFORE SEEKING TREATMENT FOR MEDICAL CONDITIONS, INCLUDING SLEEP APNEA. INFORMATION POSTED ON THE APNEA BOARD WEBSITE AND FORUMS ARE PERSONAL OPINION ONLY AND NOT NECESSARILY A STATEMENT OF FACT.
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