Radiology vendor Agfa to cut nearly $53M in costs as medical film business dwindles

Radiology vendor Agfa is seeking to cut over $52.7 million in costs amid dwindling interest in physical film for printing medical images. 

In announcing the cost-cutting plan, Agfa cited the need to adjust to the “reality in the market.” The company said it plans to reorganize all aspects of its film-related business, with hopes of achieving the spending reductions by the end of 2027. 

Up to 530 positions in Mortsel, Belgium, could be affected by the cuts, including blue- and white-collar employees and management. However, Agfa said it will seek to avoid as many forced layoffs as possible by relying on natural attrition and shifting workers into other roles.

“While we are convinced that the proposed measures are necessary for the future of our company, we are also very aware that this message might cause anxiety and uncertainty among our employees,” Pascal Juéry, CEO of the Agfa-Gevaert Group, said in a Nov. 14 announcement. “We will do our utmost to maintain a constructive social dialogue with the social partners involved and keep the period of uncertainty as short as possible.”

Agfa is a leading company in imaging and IT solutions with over 150 years of operations and more than 4,800 employees, including 2,300 in its home country of Belgium. It runs three divisions covering radiology solutions, healthcare IT and digital print. In radiology, products include analog and digital imaging systems, with Agfa producing dry digital and X-ray film for medical exams. Each week, more than 3 million radiographic scans are carried out with Agfa equipment, according to the company’s website. 

Members of the trade union ABVV said this week that the reorganization was expected, but not at this scale. A member of the union described the cuts as a “bloodbath” and said the impact will hit “like a bomb,” the Brussels Times reported Thursday. 

"For 25 years, this company has been saving money, and nothing ever came back to the workers. Now they are cutting off a large chunk instead of small pieces," ABVV's Mark Pierssens told the outlet. 

News of the cost-cutting initiative comes the same day Agfa reported its third quarter financial results. Leaders noted an acceleration of the “global market decline” in medical film sales. Revenues were down roughly 10.6% in the radiology solutions division while adjusted earnings dropped 48.3%. As part of its review, Agfa said it will stop the production and assembly of computed radiography plates and cassettes at its site in Germany, resulting in the facility’s closure. However, its direct radiography business realized a 9% top-line increase, partly driven by new business in North America.