MiMedx on Wednesday announced it is cutting 240 jobs – about one-quarter of the embattled firm’s workforce – as it struggles to survive.
The Marietta-based company, which sells injections used in orthopedics and wound coverings to treat burn victims, has been fighting to right itself as it copes with leadership upheaval and apparent problems with the accuracy of its financial disclosures.
The company plans to cut costs to match revenues, according to a statement issued by David Coles, interim chief executive officer.
“Recent business trends and our internal analysis have led us to simplify and streamline our organizational structure and reduce costs in order to improve profitability and liquidity,” he said.
The company has products in development with potential, but it needs to cut costs now to “preserve and drive long-term shareholder value,” Coles said.
Roughly half of those laid off are sales staff, according to the company. However, it was unclear from the announcement how many of those positions are jobs now based in metro Atlanta. Calls and messages to the company from The Journal-Constitution were not returned.
In June, the company announced it had to revise more than five years’ worth of financial statements. Those revisions have not yet been publicly made.
In July, Parker “Pete” Petit, resigned as chief executive and chairman. In September, Petit quit the company board in September. The company went on to say that it was treating his departure – as well as the resignations of three other top officers – as terminations for cause, which means they lose various equity and incentive awards.
As reported earlier in the AJC, the company has been under scrutiny by the Department of Veterans Affairs, the U.S. Department of Justice, the U.S. Securities and Exchange Commission, and the Food and Drug Administration, as well as an internal investigation by the company’s audit committee.
The Atlanta Journal-Constitution reported that the Veterans Affairs Medical Center in Minneapolis had parted ways with four podiatrists and a dermatologist over improprieties involving MiMedx products.
Several insurance companies have also said they would no longer cover MiMedx products.
The company also said Thursday that its auditor, Ernst & Young, had resigned from its role in auditing MiMedx financial statements for the past two years.