LEXINGTON, Massachusetts & SYDNEY, Australia – 21 August 2015 – GI Dynamics, Inc. (ASX: GID) (GI Dynamics), a medical device company that provides innovative treatments for type 2 diabetes and obesity, today announced that it is reducing headcount by approximately 46% as part of its efforts to restructure its business and expenses in response to the termination of its U.S. pivotal trial of EndoBarrier Therapy and to ensure sufficient cash remains available to establish new priorities, continue limited market development and research, and to evaluate strategic options.  Following this reduction in workforce, GI Dynamics expects to have approximately 29 full-time employees. GI Dynamics estimates that it will incur aggregate charges in connection with its reduction in workforce of approximately US$0.6 million for employee severance and benefit costs.  Of this amount, GI Dynamics expects to record a restructuring charge of approximately US$0.5 million in the third quarter ending 30 September 2015.  All charges are expected to result in future cash expenditures.

GI Dynamics committed to this course of action on 20 August 2015, and expects to complete the reduction in workforce by 31 December 2015.

 Robert Solomon

 Vice President of Finance & Company Secretary