Henry Schein announced that it is restructuring the company, including conducting an undisclosed number of layoffs, in the hopes of saving the company up to $100 million, according to a company press release dated August 6. The company was last restructured in 2022.
As part of the company's updated 2024 financial guidance, the restructuring plan will integrate recent acquisitions, downsize operations, and increase efficiencies to meet an annual run-rate savings of $75 million to $100 million, according to the company.
“The sales have not grown as rapidly as we thought. Some of that is attributable to the fact that inflation does not exist at the moment,” Schein CEO Stanley Bergman said in a call about the company earnings on August 6. “We believe in our markets very moderate naturally to go down slightly as customers are more price conscious and moving to some alternative brands and own brands.”
The restructuring charges, which are expected to primarily cover the cost of severance pay and facility-related costs, are expected to be incurred in the second half of 2024 and in 2025. However, since plans continue to be finalized, a complete accounting of these charges has not been estimated, according to the release.
In August 2022, the company announced a restructuring. That round of layoffs and other changes were completed on July 31, 2024.
The company provided no additional comment about the layoffs to DrBicuspid.com.
Despite having to make cutbacks, the company reported about $3 billion in revenue for the second quarter of 2024. This was an approximate 1% increase compared to revenues during the same quarter in 2023, but it fell below revenue projections of about $3.27 billion, according to the release.
A 4% growth in sales from acquisitions, offset by a combined 1% decrease due to lower personal protective equipment sales and negative foreign exchange rates, drove the company's revenue. Furthermore, value-added service and technology sales rose nearly 11% to $200 million.
Though sales trends at its distribution businesses improved, their recovery has been somewhat stymied by the ransomware attack that left most of Schein's operations paralyzed in the fall of 2023, according to the release. In November 2023, Schein announced that it expected the cyberstrike would hurt its sales for 2023.
In October 2023, Schein announced that it was struck by a ransomware attack. The ransomware as a service hacker BlackCat claimed responsibility for the strike.
In December 2023, a data breach notification revealed that cybercriminals that hit Henry Schein not only may have accessed the personal data of about 29,000 people, but the ransomware gang infiltrated the company's network for more than two weeks before it was discovered.
The cyberstrike occurred on September 27, but Henry Schein did not discover it until October 14. A day later, the dental distributor notified the public of the cybersecurity incident and that it was taking most of its systems offline.
