Johnson & Johnson to Cut 6% of Medical Device Jobs--2nd Update
January 19 2016 - 7:29AM
Dow Jones News
By Chelsey Dulaney
Johnson & Johnson on Tuesday said it would cut about 3,000
jobs in its medical-devices division as part of an effort to remove
$1 billion in annual costs in the business that makes sterilization
equipment and blood glucose monitoring systems.
The eliminated positions represent 2.5% of J&J's global
workforce and up to 6% of its medical device segment.
Shares of J&J added 1.1% to $98.11 in premarket trading.
J&J's medical device sales have been struggling lately, with
sales slipping 2.9% in the first nine months of the year and 3.4%
in the U.S. The company said the restructuring reflects "the
changing needs of the global medical device market."
The moves relate to J&J's orthopedics, surgery and
cardiovascular businesses. The company said its consumer medical
devices businesses, vision care and diabetes care businesses won't
be affected by the restructuring.
J&J said that while it wasn't providing specific information
on potential business exits, it expected "any potential sales
impact to be minimal."
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, 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. The company said it also doesn't expect the
restructuring to affect its plans to buy back $10 billion in stock
or any future acquisitions.
In addition to its medical device business, J&J 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 08:14 ET (13:14 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
Johnson and Johnson (NYSE:JNJ)
Historical Stock Chart
From Apr 2024 to May 2024
Johnson and Johnson (NYSE:JNJ)
Historical Stock Chart
From May 2023 to May 2024