Medical company Smith & Nephew fired roughly 100 employees at its Memphis, Tenn., and Massachusetts offices, citing the medical device tax included in The Patient Protection and Affordable Care Act (i.e. “Obamacare”), a Fox affiliate in Memphis reports.
“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 report reads. “The company says it laid off less than 100 employees between its Tennessee and Massachusetts offices.”
The company released a statement explaining the reason for the layoffs: "The nearly $30 billion tax on medical devices that took effect Jan. 1, 2013, has impacted a number of companies across the U.S."
The statement adds that the company is not exempt from the multi-billion dollar medical device tax included in President Obama’s healthcare overhaul.
"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 reads.
"The company is providing the affected employees with a comprehensive severance package and outplacement support," it adds.
But here’s something: The company was recently fined millions of dollars by the Securities and Exchange Commission after an investigation dating back to 1997 showed that Smith & Nephew used “off-the-books money from its distributor in Greece for cash incentives to encourage providers to buy smith & nephew products.”
When asked by FOX13 News whether the layoffs had anything to do with the SEC’s $16.8 million fine, a 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,” FOX13 News explains.
Smith & Nephew says it will provide the laid off employees with “a comprehensive severance package and outplacement support.”
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