Johnson & Johnson to cut about 3,000 jobs in medical devices
JANUARY 19, 2016 3:04 PM
BY MATTHEW PERRONE AND TOM MURPHY
AP Business Writers
Johnson & Johnson said Tuesday that it plans to cut about 3,000 jobs over the next two years as the health care conglomerate works to restructure its medical devices business.
The New Brunswick, New Jersey, company said that amounts to more than 2 percent of its global workforce of around 127,000 people and 4 percent to 6 percent of its employee total in medical devices.
The cuts come after a tough year for the healthcare bellwether, which has seen sales of its prescription drugs, devices and consumer medicines squeezed by a weakening global economy and unfavorable currency exchange rates.
"These actions recognize the changing needs of the global medical device market," said Gary Pruden, chairman of Johnson & Johnson's medical device unit, in a statement.
The restructuring focuses on the company's orthopedics, surgery and cardiovascular businesses. It won't affect consumer medical devices, pharmaceuticals or consumer businesses.
J&J has struggled to revive sales of medical devices, particularly brands like DePuy orthopedic implants and Ethicon surgical equipment. In October the company said device sales dropped 7.3 percent to $6.1 billion in the previous fiscal quarter. In the same month, J&J sold its Cordis heart devices unit, which previously accounted for about one-quarter of device sales.
Wells Fargo analyst Lawrence Biegelsen noted that medical devices have been "one of the weaker performing businesses in recent years."
"As such, we believe that the restructuring should be a positive step towards driving longer term growth of the business and enhance profitability over time," Biegelsen said in a note to investors.
The company's actions will lead to annual pre-tax savings of $800 million to $1 billion, much of which will be realized by the end of 2018. J&J said it will consider "strategic options" for underperforming business units.
J&J will book a fourth-quarter charge of about $600 million in connection with the restructuring.
Leerink Swann analyst Danielle Antalffy said Tuesday's announcement increases the likelihood of an acquisition to boost the company's medical device prospects. She notes J&J has roughly $37 billion in cash.
Citing conversations with J&J executives, Antalffy states "it's clear to us that it's a matter of when, not if J&J does a deal."
J&J shares rose 4 cents to $97.04 in trading Tuesday. Its shares have fallen more than 6 percent over the past year.
Read more here: http://www.kentucky.com/living/health-and-medicine/article55408700.html#storylink=cpy
Very good guide this site. Certainly insightful designed for go through plus education. That restructuring makes a specialty of the business's orthopedics, medical operation and even cardio exercise organisations. It's not going to have an impact individual clinical instruments, prescriptions and individual organisations.
ReplyDeleteThis restructuring would make your classic of your business's orthopedics, health business and perhaps aerobic exercise organizations. It will not impact man or women healthcare appliances, medications plus get redirected here organizations.
ReplyDeleteThis kind of restructuring would certainly help make the vintage of one's organization's orthopedics, well being enterprise and more info maybe fitness agencies. You won't influence person or perhaps females health-related devices, drugs additionally acquire sent straight the following agencies.
ReplyDeletemedical devices and all operation devices are counted for the flow of the rate of the eases. It has been marked for the movement of the visit this page for all ideal paths. The range is derived for the flow of the offers for the humans.
ReplyDeletemedical devices are purchased for the success and all problematic use of the offers. The reign of the medicine and website is explored for the humans. The intensity is offered for the width of the scores for the parents.
ReplyDelete