Johnson & Johnson is reducing its 4,820 employees worldwide, as it’s facing stiff pressure for patent expirations on two important drugs over the next two years, which can erode profits worth million dollars.
The cut would amount 3 to 4 % of the company’s global work force of 120,000 people. Company also predicted that the restructuring would entail pretax charges of $550 to $750 million in the second half of 2007 and to better integrate its Cordis business company would also consolidate certain operations at the pharmaceuticals segment. Apart from it, J&J will streamline companywide functions such as human resources, information technology and finance.
New Brunswick, N.J-based Johnson & Johnson is operating from 57 countries, worldwide, however, it declined to elucidate, exactly where the cuts would take place. Company gives indication that it would close a Mountain View, Calif., operation and eliminate the jobs of 600 of the people who work there and additional 200 people there will be relocated.
J&J is hoping to meet its 2007 profit targets of $4.02 to $4.07 per share, as company feels that the job cuts and other streamlining efforts would save $1.3 billion to $1.6 billion a year. News pushed J&J’s shares by $1.21, or 2 percent, to $61.28.
Pharmaceutical company lost its customers confidence, when federal health advisers and medical researchers have raised safety questions about drug-coated stents. Research has alleged that most patients with drug-coated stents face a higher risk of heart attacks and death than patients with bare-metal stents, and that all stent users have an increased risk of blood clots.
Report shrinks the sale of such stents, as earlier this month Johnson & Johnson discloses that its sales for Cypher drug-coated stents in US dropped 41 percent.
Via: New York Times
