Staar Surgical Announces Layoffs Amid Challenges in Chinese Market

Staar Surgical, a leading manufacturer of implantable lenses for vision correction, has announced significant job cuts at its California facilities as the company grapples with ongoing challenges in its largest market, China. The move comes as part of a broader strategy to navigate macroeconomic pressures and geopolitical uncertainties affecting the business.

Layoffs and Operational Adjustments

Staar Surgical will lay off 115 employees on April 21, 2025, across two California locations. The permanent cuts will affect 110 people in Monrovia and five in Aliso Viejo. The majority of the affected positions in Monrovia are production operators, technicians, and coaches, according to a Worker Adjustment and Retraining Notification (WARN) letter filed with the state.

Despite these reductions, Staar emphasizes that it is not closing any facilities and will maintain a workforce of over 550 employees in Southern California. The company's Monrovia site houses its global administrative offices, principal lens manufacturing plant, and warehouse and distribution facilities. Meanwhile, the Aliso Viejo location is responsible for raw material production for lenses and hosts an advanced research facility.

Market Challenges and Financial Performance

The decision to reduce staff comes in response to weakening demand in China, which represents Staar's largest end market. In 2024, the company derived 94% of its revenue from sales outside the United States, with two distributors in China and Hong Kong accounting for approximately 51% of consolidated net sales.

CEO Tom Frinzi reported that macroeconomic conditions and consumer confidence in China remained weak, despite a government stimulus program announced in September 2024. The impact on Staar's business has been significant, with sales to Chinese distributors falling 13% year-over-year to $161.3 million in 2024.

The company's financial results reflect these challenges, with Staar reporting a net loss of $20.2 million for the full year 2024, compared to a net income of $21.3 million in the previous year. The demand for Staar's cash-pay implantable Collamer lenses in China "deteriorated dramatically" late in 2024, according to Frinzi.

Outlook and Strategic Response

While procedure volumes showed some improvement in January 2025, Staar anticipates continued lower demand in China throughout fiscal 2025, particularly in the first half of the year. In response, the company is implementing a multi-faceted approach to address these challenges:

1. Working with distributors to manage elevated inventory levels
2. Reducing production output
3. Cutting capital expenditures
4. Decreasing operating expenses

These measures, including the recently announced layoffs, are part of Staar's efforts to position itself strategically in the face of ongoing market pressures. As the company navigates these challenges, it will continue to focus on its core competencies in implantable lens technology while adapting to the evolving global economic landscape.