Intuitive Surgical to Lay Off 331 Workers in California Amid Shift Schedule Change

Intuitive Surgical plans to lay off 331 employees in California by October 27, citing a shift to a global "hub model" and transitioning to a new work schedule. The majority of affected positions are assembly technician roles. The company has reported solid growth and a successful launch of its latest robotic system, the da Vinci 5, but has experienced tens of thousands of layoffs in the medtech industry in recent years.

Intuitive Surgical (Nasdaq: ISRG), a leading provider of surgical robotics, has announced plans to lay off 331 employees in Sunnyvale, California, by October 27, 2025. The company filed a Worker Adjustment and Retraining Notification (WARN) notice with the state, citing a shift to a global "hub model" and transitioning to a new work schedule. The majority of the affected positions are assembly technician roles [1].

This announcement comes as Intuitive Surgical continues to expand its product portfolio and successfully launch its latest robotic system, the da Vinci 5. The da Vinci 5, which received FDA clearance in 2024 and CE mark in July 2025, has been well-received in the market and is expected to drive further growth for the company. Despite these advancements, the medtech industry has seen tens of thousands of layoffs in recent years, highlighting the sector's ongoing restructuring [1].

Intuitive Surgical's recent second-quarter financial results were encouraging, with revenue rising 21% year-over-year to $2.44 billion, driven by high-margin consumables and system sales. The company's P/S ratio of 18.71 far exceeds industry averages, reflecting investor optimism about the RAS market's potential [2]. However, the high valuation has also raised questions about sustainability and the impact of emerging competition.

The company's response to intensifying competition has been twofold: innovation and expansion. The da Vinci 5 system, with its enhanced computing power and regular software updates, is already being used by over 2,500 surgeons. Meanwhile, Intuitive Surgical is expanding into orthopedic robotics through acquisitions and partnerships, aiming to unlock new revenue streams as robotic-assisted joint replacements gain traction in ambulatory surgery centers [2].

For investors, the key question is whether Intuitive Surgical's valuation reflects a realistic assessment of its growth trajectory. While the company's trailing twelve-month free cash flow has surged and analysts project 15–17% procedure growth in 2025, the PEG ratio of 3.94 suggests the market is pricing in earnings growth that may not materialize for several years. A cautious approach is warranted, as the entry of Medtronic and Johnson & Johnson could pressure pricing and margins in the long term [2].

In conclusion, Intuitive Surgical's layoffs reflect a strategic shift in its production strategy, as the company aims to adapt to a global market and maintain its competitive edge. Despite the challenges posed by emerging competition, the company's strong moat, recurring revenue model, and innovation pipeline offer compelling long-term prospects for investors. However, those seeking near-term gains may find the current multiples too aggressive, particularly in a market where competition is beginning to coalesce.

References:
[1] https://www.massdevice.com/intuitive-lay-off-331-workers-california/
[2] https://www.ainvest.com/news/intuitive-surgical-sustained-competitive-edge-robotics-assisted-surgery-valuation-realism-long-term-growth-potential-2508/