Johnson & Johnson to cut 8,000 jobs
NEW YORK—Johnson & Johnson said Tuesday it will cut as many as 8,000 jobs and streamline its operations to cut costs as it braces for changes in the health care industry.
The New Brunswick, N. J., company said the cuts will affect 6 percent to 7 percent of its global work force of about 118,700 workers.
The restructuring, one of Johnson & Johnson’s biggest ever, will prompt a charge of up to $1.3 billion pretax in the fourth quarter.
Johnson & Johnson plans to simplify its business structure and estimates that it will save $800 million to $900 million next year and $1.4 billion to $1.7 billion annually after the restructuring is complete in 2011.
Revenue for the company, the world’s most diversified health-products maker, fell 5 percent in the third quarter as intensifying generic competition slashed sales of about a half-dozen of its prescription medications, including the schizophrenia drug Risperdal and the epilepsy treatment Topamax.
William C. Weldon, chairman and chief executive officer, said the moves are intended to position the company for long-term growth in an evolving, and sometimes turbulent, market.
“These types of changes are difficult under any circumstances and will have a very personal impact on people who have been dedicated to the mission of Johnson & Johnson,” he said. “We recognize their contributions to the achievements of our business and are committed to treating them fairly and with respect throughout this process.”
The new restructuring program follows management’s decision to reorganize the company’s comprehensive care business in August. That unit was created under a 2008 restructuring to boost sales, though sales were down during the first half of this year. The unit makes medical devices and tests.
In July 2007, the company undertook a restructuring program that reduced its work force by 4 percent, or about 4,800 jobs.
“When you look at the total economic environment, I don’t think anybody knows what’s going to happen,” Weldon said Tuesday. “But nobody expects it to come back tomorrow.”
In Tuesday’s trading, shares of Johnson & Johnson fell 56 cents to $58.93.
Log into MyBuffalo to post a comment
MyBuffalo is the new social network from Buffalo.com. Your MyBuffalo account lets you comment on and rate stories at buffalonews.com. You can also head over to mybuffalo.com to share your blog posts, stories, photos, and videos with the community. Join now or learn more.
Reader comments