Johnson & Johnson (NYSE:JNJ) To Cut 3,000 Jobs Over The Next Two Years
Johnson & Johnson (NYSE:JNJ) stated on Tuesday that they would lay off about 3,000 jobs in its medical-device division. The process would be carried out over the course of the next two years. The company said that this step was necessary to revive it struggling medical-devices unit. This layoff would account for about 2% of all health care employees who total around 127,000 worldwide and account for 6% in its medical device segment.
This cutoff comes after a tough period for the company, which was characterized by the sale of its prescription drug and devices, medicine affected by a weakening global economy and an unfavorable currency exchange. The company expects that this cutoff will help it save between $800 million and $1 billion. These saving will be used by the company to grow its device business. Some of the specific areas, which the cut relates to, includes J&J orthopedics, cardiovascular and surgery. The company also noted that there were no immediate plans to eliminate certain products.
J&J has been struggling to revive their medical device units especially with the sale of brands such of DePuy artificial hips and joint and also Ethicon surgical equipment. Last year in October the company’s sale for devices dropped by around 7%. This translated to about $6.1 billion for the previous fiscal quarter. During this month, J&J also sold its Cordis heart device unit, which had initially accounted for one-quarter of device sale.
During the first nine months of 2015, the company’s medical devices sale accounted for about $19 billion but fell by around 10.4%, making this line of products its poorest-performing segment. This decline is what necessitates change in the department, and this is what the company is trying to do by the Layoff
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J&J has also struck new partnerships with the primary aim of increasing its overall revenue. A partnership with International Business Machines Corp. (NYSE:IBM) will help the company to create virtual coaching service for patients. A partnership with Alphabet Inc (NASDAQ:GOOGL) will help the company to develop surgical tools which use imaging technology advances.