Dentsply Sirona, a dental device maker, is set to restructure its business model, resulting in a reduction of its workforce by up to 10%. The company’s 2021 annual report stated that it had 15,000 employees, so up to 1,500 jobs could be cut.
Dentsply hopes the restructuring will help it achieve significant savings of over $200 million annually once the process is complete. The restructuring will include the creation of five global business units, simplified management structures, and consolidation of overlaps into one overarching unit.
In addition to layoffs, the company is also planning to hire a new senior VP of quality and regulatory to oversee quality assurance and regulatory affairs across the entire company. The restructuring plan is expected to cost Dentsply up to $165 million in one-time charges, the majority of which will impact the company’s bottom line this year. Despite the cost, the company expects the restructuring to help it achieve consistent returns by improving its execution and building a winning portfolio.
The COVID-19 pandemic has had a significant impact on businesses and the economy, and many companies have had to make tough decisions to stay afloat. The dental industry has been no exception, as many people have put off routine dental care during the pandemic. Dentsply Sirona’s restructuring plan and job cuts are likely a response to these challenges, as well as the company’s past financial reporting issues.
The restructuring plan, which aims to save the company more than $200 million per year, involves a significant reduction in the workforce, with up to 1,500 jobs potentially being eliminated. While these types of decisions are difficult, Dentsply’s CEO is confident that the plan will help the company achieve stronger and more predictable results and ultimately add value for stakeholders.
In addition to job cuts, the company is reorganizing its operational structure and consolidating overlaps among its businesses into a single, overarching unit. The company is also planning to add a new executive position focused on quality and regulatory affairs, indicating a continued commitment to maintaining high standards in these areas.
While the restructuring plan will come with significant one-time charges, Dentsply hopes that it will ultimately generate cost savings that can be reinvested in the company to improve execution, build a winning portfolio, and return to growth. The company’s recent net loss for Q3 2022 highlights the need for action to address these challenges and position the company for success in the future.