Mentor Worldwide corporate officials are being tight-lipped about their plan to cut their workforce but local employees will feel the impact. A company spokesman said the cosmetic-product and breast-implant maker in Goleta will downsize an unspecified number of employees at its 400-person corporate headquarters within the month. The company, which became a unit of conglomerate Johnson & Johnson two years ago, said the jobs are being eliminated in the face of waning demand for its product line.
Chris Allman, a Mentor spokesman, told the News-Press that the reduction in force is occurring "in all departments across the organization here," but did not pinpoint what types of jobs will be affected by the cut or if they will be absorbed by employees at other J&J-affiliated companies.
Mr. Allman believes the layoff isn't large enough to trigger a Worker Adjustment and Retraining Notification to state and federal labor authorities, who provide unemployment and job training assistance. WARN offers protection to employees, their families and communities by requiring employers to give affected employees and other state and local representatives notice 60 days in advance of a plant closing or mass layoff.
"I have not received a WARN notice, but it could be delayed because of the Labor Day holiday," said Ray McDonald, executive director at Santa Barbara County Workforce Investment Board, an agency that assists dislocated workers. "The WARN notice is triggered by 50 employees laid off."
Affected employees can apply for positions with other J&J-owned companies, he said.
Mentor, which has an estimated 2,000 employees worldwide, used to have manufacturing operations in Goleta but chose to move them out of state. In 1991, Mentor relocated its manufacturing to Dallas to escape high production costs.
Johnson & Johnson acquired Mentor in 2009 for $1 billion. The company is a stand-alone business unit reporting through Ethicon Inc., a provider of suture, mesh, hemostats and other products for a wide range of surgical procedures.
J&J doesn't reveal the sales of breast augmentation products, but in the second quarter of fiscal year 2011, Ethicon contributed $1.3 billion to Johnson & Johnson's total revenue of $16.6 billion. While this segment doesn't form a large part of Johnson & Johnson's total operations, Ethicon has a range of other products whose sales are growing.
Mentor has several competitors in the breast-implant arena, such as Allergan, the Irvine-based maker of wrinkle-smoother Botox, other drugs and medical cosmetics.
Analysts say the breast-implant market is more sensitive to economic conditions than most. Most of it comprises cosmetic surgeries that can cost thousand of dollars and generally aren't covered by health insurance.
Before the economic downturn, easy credit made it possible for more people to splurge on cosmetic procedures, especially breast implants.
Mentor doesn't say how much credit its customers use, but an industry analyst following the company estimated in a Wall Street Journal article that, prior to the recession, roughly 50 percent of breast-implant revenue came on credit. The analyst now estimates that between 30 percent and 40 percent of patients use credit to pay for their breast implants.
Mr. Allman would not speculate on whether future layoffs are planned, but said the company, which was founded on the South Coast in 1984, did experience other layoffs when Mentor was a publicly traded company.
"Mentor routinely evaluates its business model and structure, examining all aspects of its internal resources, skill sets and capabilities to make sure it is aligned to meet changing dynamics in the marketplace," Mr. Allman stated.
Typical story for a J&J division. They always publicize that liad off employees are free to apply for jobs within other J&J locations. Would like to see J&J actually publish what that conversion rate is. I'll bet it is <5%. That standard press release line is just PR BS to soften the blow in readers minds.