A New York-based provider of medical diagnostics products announced the company will cut its workforce by 10 percent–and says a tax in the Affordable Care Act is the reason.
Welch Allyn, headquartered in Skaneateles Falls, N.Y., announced Tuesday a workforce reduction of 275 over the next three years–or 10 percent of the company’s payroll. NBC Syracuse and Syracuse Post-Standard reports the company’s management has attributed the layoffs to the medical device tax in the health care law:
The moves are meant to prepare Welch Allyn to address the new “onerous” U.S. Medical Device Tax scheduled to take effect next year under the Affordable Care Act, the company said.
Competitors are making similar job cuts, Chadderdon said. “We know that many companies are postponing or canceling investment decisions, laying off employees and-or moving operations offshore,” he said.
The company can’t just pass on the tax increase to its customers — clinics, doctors’ offices and hospitals — who are already being pushed to cut costs, Chadderdon said.
Some of the jobs cut will move to Tijuana, Mexico, where the company will house its financial services; the company says less than a dozen jobs at the New York location will be affected by the move to Mexico, according to the Syracuse Post-Standard.
The medical device tax goes into effect in 2013, and would place a 2.3 percent excise tax on medical device manufacturers.
The House of Representatives voted to repeal the tax in June in a bipartisan vote; 37 Democrats voted with 233 Republicans to roll back the tax.