Boston Scientific announced layoffs today and the news articles mentioned in passing that they had recently adopted zero-based budgeting, a concept we discuss in class.  I dug a little further and found the transcript from their latest quarterly conference call.  While it doesn’t really dive into what ZBB is, it does show that some companies are using this idea to better match their capabilities and resources with the market demand when big changes are needed.

Hot topic number two is our zero-based budgeting program or ZBB. We have instilled a great deal of discipline in headcount expense management, and over the past few years have done an excellent job of controlling our operating expenses while aiming to drive down product cost by above 5% each year. However, with rapidly changing market conditions that will put more pressure on margins, we know that we must do more. We need to examine our expense base from scratch as if we are building the required infrastructure to support our size and our expected growth as we know it today. We also need to examine the various business and sales models we use in each of the markets we serve and ask ourselves difficult questions about how to serve our customers profitably. So we’ve embarked on zero-based budgeting program to deeply examine our large functions and determine what activities we’re performing and what expenses we’re occurring for activities that are no longer necessary to support and grow our business profitably.

via Boston Scientific’s CEO Discusses Q4 2010 Results – Earnings Call Transcript – Seeking Alpha.