Despite the whole recession-proof mantra, medical device makers have suffered in this economy. Big-ticket items like Intuitive Surgical's (NASDAQ:ISRG) surgical robots and Hansen Medical's (NASDAQ:HNSN) catheter systems have been hit especially hard, but even makers of implantable devices -- like Boston Scientific (NYSE:BSX) and Medtronic (NYSE:MDT) -- have had trouble keeping up the sales growth of yesteryear.

Medtronic finished up its fiscal year with a 8% year-over-year revenue increase for the year, but last quarter's sales were only up 5% at constant currency and were down 1% when you factor in the stronger dollar. The next fiscal year looks to be just as challenging, with revenue expected to be up just 5% to 8% at constant currency.

Medtronic is doing an OK job at keeping costs down while it waits for a turnaround. Despite the decrease in revenue for the quarter, it was able to post a non-GAAP earnings increase. After subtracting out several one-time charges for things like restructuring, acquisitions, a charitable donation, and a payment to settle a lawsuit with Johnson & Johnson (NYSE:JNJ), earnings per share were up 5%.

But management isn't satisfied with the current spending level and announced cuts of another 1,500 to 1,800 employees today. The cuts will cost Medtronic some cash now for severance pay -- expect more one-time charges next quarter -- but being leaner should help earnings grow faster than revenue.

Unfortunately it doesn't seem that the cuts are going to have a major impact on the bottom line for this fiscal year. The aforementioned 5% to 8% expected revenue growth will only be turned into a 6.2% to 9.6% increase in earnings per share because of dilution from recent acquisitions.

After the haircut that investors gave it today, Medtronic is trading at about 10 times the midpoint of next year's revenue guidance. That's not particularly expensive, but it's also not wipe-the-drool-from-your-face cheap, either. Investors with extra money sitting around might want to find an alternative place for the cash, but I can't fault longtime investors for holding on for a turnaround.

Hansen Medical and Intuitive Surgical are Motley Fool Rule Breakers selections. Johnson & Johnson is a Motley Fool Income Investor recommendation. Try any of our Foolish newsletters today, free for 30 days.

Fool contributor Brian Orelli, Ph.D., doesn't own shares of any company mentioned in this article. The Fool has a disclosure policy.