J&J plans to cut 4,800 jobs in recast
Johnson & Johnson will reduce its global work force by up to 4% to cut costs due to a slump in sales.
By Agencies |
NEW JERSEY: Johnson & Johnson said on Tuesday it would reduce its global work force by up to 4%, or almost 4,820 jobs, in a restructuring to cut costs due to a slump in sales of its heart stents and looming expirations for key drug patents over the next few years.
The health care giant, which employs about 1,20,500 people worldwide, predicted the restructuring would entail pretax charges totaling $550 million (euro 401.25 million) to $750 million (euro 547.17 million) in the second half of 2007.
Excluding the charges, the maker of contraceptives, contact lenses, prescription drugs and baby products still expects to meet its 2007 profit targets. Johnson & Johnson shares rose $1.48, or 2.5%, to $61.55.
Johnson & Johnson, the No. 4 US drug company, said the restructuring targets primarily its pharmaceuticals segments, which faces significant patent expirations over the next few years, and its Cordis stent-making unit. Under the restructuring, Johnson & Johnson will consolidate certain operations at the pharmaceuticals segment and better integrate its Cordis business.
The company said the moves are expected to generate pretax, annual cost savings of $1.3 billion (euro 0.95 billion) to $1.6 billion (euro 1.17 billion) next year.
Johnson & Johnson said it will continue to invest in promising technologies and product opportunities in the fastest growing segments of the health care industry. The company still sees a full-year profit of $4.02 (euro 2.93) to $4.07 (euro 2.97) per share, versus the average analyst estimate of $4.06 (euro 2.96) per share, based on a survey by Thomson Financial.
Sales of J&J’s key anemia drug Procrit, formerly the company’s best-selling drug, slid 6% to $758 million (euro 553 million) during the quarter.
The health care giant, which employs about 1,20,500 people worldwide, predicted the restructuring would entail pretax charges totaling $550 million (euro 401.25 million) to $750 million (euro 547.17 million) in the second half of 2007.
Excluding the charges, the maker of contraceptives, contact lenses, prescription drugs and baby products still expects to meet its 2007 profit targets. Johnson & Johnson shares rose $1.48, or 2.5%, to $61.55.
Johnson & Johnson, the No. 4 US drug company, said the restructuring targets primarily its pharmaceuticals segments, which faces significant patent expirations over the next few years, and its Cordis stent-making unit. Under the restructuring, Johnson & Johnson will consolidate certain operations at the pharmaceuticals segment and better integrate its Cordis business.
The company said the moves are expected to generate pretax, annual cost savings of $1.3 billion (euro 0.95 billion) to $1.6 billion (euro 1.17 billion) next year.
Johnson & Johnson said it will continue to invest in promising technologies and product opportunities in the fastest growing segments of the health care industry. The company still sees a full-year profit of $4.02 (euro 2.93) to $4.07 (euro 2.97) per share, versus the average analyst estimate of $4.06 (euro 2.96) per share, based on a survey by Thomson Financial.
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Earlier this month, Johnson & Johnson said its second-quarter profit rose 9%, but US sales of its Cypher drug-coated stents declined 41%. A drug-coated stent is a tiny mesh scaffold that props open heart arteries and slowly releases a drug to keep them from reclogging. Stent sales have been falling amid reports of safety conxcerns since last fall. Sales of J&J’s key anemia drug Procrit, formerly the company’s best-selling drug, slid 6% to $758 million (euro 553 million) during the quarter.
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