Avante Health and Medtronic eye nearly 400 job cuts, furloughs in Orange County
A pair of medical technology companies in Orange County announced plans to either lay off or furlough nearly 400 workers before the end of the year, according to filings with California's employment department.
Medtronic in Santa Ana says its layoffs are "temporary" while it repairs the roof of its medical device-making facility, while Avante Health Solutions in San Clemente hopes to retain everyone through bankruptcy.
Avante, which refurbishes and repairs medical equipment, filed for Chapter 11 bankruptcy protection on Oct. 8 in Delaware. It sold most of its assets to Staple Street Capital, an affiliate of New York-based private equity firm.
The company said in a filing with the Employment Development Department that it plans to eliminate 159 jobs in San Clemente by Nov. 25, including its chief executive, but the exact number of affected employees has yet to be determined. Staple Street is expected to close on the deal to buy Avante before the end of the year, if it receives court approval next month.
Staple Street said it anticipates extending offers of employment to "substantially all employees" of Avante's workforce, according to an Oct. 8 letter filed with the EDD by Ana Rodarte, Avante's vice president of human resources.
In the "unlikely event" that Avante can't reach an agreement to sell to Staple Street, Rodarte wrote that Avante may need to discontinue operations in San Clemente.
The jobs affected by the change at Avante cover a broad swath of positions including Avante Health Solutions CEO and President Jim Leitl, accountants, soldering technicians, logisticians, procurement officers, ultrasound technicians and vice presidents in charge of customer and commercial operations, quality assurance and sales.
Avante's top executive Leitl was not available for comment.
In a statement issued Oct. 8, Leitl said that his company had been working to strengthen its finances "in the face of difficult circumstances brought on by ongoing litigation," which has cost Avante $20 million over the past several years.
"After evaluating our options, the board and management team determined that entering into an agreement with Staple Street Capital, who will support Avante's long-term success, is the best path forward," Leitl said.
Avante has sued over its right to access, service and maintain diagnostic imaging medical equipment manufactured by Philips Medical Systems.
Staple Street is considered a "stalking horse bidder" in the bankruptcy process, meaning that it made a bid on Avante's bankrupt assets before a public auction could be held.
Leaky roof in Santa AnaSeparately, Medtronic Inc. announced plans to temporarily lay off 237 workers at its Santa Ana business unit by Dec. 4., according to an EDD filing.
Janet Cho, a spokeswoman for Medtronic, wasn't immediately available for comment on the furloughs.
In a letter filed with EDD on Oct. 4, Medtronic employee relations specialist Bryan Tellez-Tolentino wrote that the company plans to shut down manufacturing due to "roof remediation" at the facility at 1851 E. Deere Ave. Beginning in early December, employees in four "clean rooms" will not be coming on site, he said. "We anticipate that these plans would be temporary."
Clean rooms are designed to keep everything — from dust to airborne organisms — away from whatever material is being handled inside.
Medtronic plc is an American-Irish medical device company, and has its operational and executive headquarters in Minneapolis, Minn. The company's legal headquarters moved to Ireland after its acquisition by Irish-based Covidien in 2015.
The Medtronic furloughs in Santa Ana are the second time the medical device maker announced cuts this year.
In the spring, the company said it would eliminate 44 employees at a facility in Carlsbad as it restructured and relocated certain operations, according to a federal Worker Adjustment and Retraining Notification Act filing with California.
The company did not specify in the notice which operations would be affected.
The layoffs were expected to take effect in mid-May and primarily affect engineer roles but also include several technician and project management positions.
WARN notices are required when an employer lays off more than 50 employees or a significant percentage of its staff.
