US drugs major Abbott Laboratories has announced plans to close a facility in Galway, Ireland where it currently employs 498 people, while some 700 jobs are to go at Temecula, California.

The moves are the result of “overcapacity due to significant improvements in manufacturing efficiency and current market conditions”, said Abbott. Both sites are involved in the manufacturing of stents and that particular area has suffered product recalls and safety concerns, especially surrounding cardiac implants, which has weakened demand over the last few years.

Commenting on the job losses in Ireland, the government’s minister for enterprise, trade and employment, Micheal Martin, said that the closure was “a major blow”. However he noted that Abbott has offered to find replacement employment for the Galway-based workers in its other Irish facilities and will provide competitive redundancy terms.

Mr Martin added that despite the news, “Abbott continues to have a strong presence in Ireland and remains one of our major employers”. The company employs over 3,000 people in Sligo, Longford, Clonmel, Donegal and Cavan.

The plant closure is a setback for the Irish government but that has been tempered by two major deals signed last week by big US players. Merck & Co announced plans to invest 200 million euros in a new vaccines facility in Carlow, while Baxter International will put in more than 75 million euros over six years to “introduce new technologies and higher value products” to its manufacturing plants in Castlebar and Swinford, Co Mayo.

As for Temecula, 4,000 staff will still remain at the facility, which is currently being expanded, after the lay-offs are finalised. Abbott says that the job cuts will have no adverse effect on its Xience stent which last week got a thumbs-up from a US Food and Drug Administration advisory panel, marking a major step towards full marketing clearance in coronary artery disease. The Xience stent system, which is coated with the immunosuppressant compound everolimus, is currently sold in 64 countries outside the USA.