Johnson & Johnson to Cut 6% of Medical Device Jobs--Update
January 19 2016 - 7:52AM
Dow Jones News
By Chelsey Dulaney
Johnson & Johnson on Tuesday said it would cut up to 6% of
its workforce in its medical-devices division as part of an effort
to cut $1 billion in annual costs in the business that makes
sterilization equipment and blood glucose monitoring systems.
Shares of J&J added 1.3% to $98.25 in premarket trading.
The company is aiming to cut $800 million to $1 billion in
pretax annualized costs, with most realized by the end of 2018.
J&J said the restructuring would give it more flexibility to
fund new growth.
As part of the restructuring, which will reduce head count in
the division by 4% to 6%, J&J said it would book $2 billion to
$2.4 billion in charges. It will take a restructuring charge of
$600 million in the fourth quarter of 2015. Excluding those charges
and other special items, J&J backed its 2015 forecasts.
"These actions recognize the changing needs of the global
medical device market and will deliver more value to customers,
increasing our competitive advantage and driving growth and
profitability for our business," said Gary Pruden, the world-wide
chairman of the medical devices business.
J&J noted that its consumer medical devices businesses,
vision care and diabetes care businesses won't be affected by the
restructuring.
J&J's medical device sales have been struggling lately. In
the first nine months of the year, J&J's medical device sales
slipped 2.9% on an operational business. U.S. sales were down
3.4%.
The company also has been hurt by currency headwinds, patent
expirations and increased competition for many of its pharma
products, such as its hepatitis C treatment Olysio.
Write to Chelsey Dulaney at Chelsey.Dulaney@wsj.com
(END) Dow Jones Newswires
January 19, 2016 07:37 ET (12:37 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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