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J&J continues streamlining by cutting managers

Published on 11/11/09 at 12:10pm

 

Johnson & Johnson has announced further restructuring that will see more than 8,000 jobs being cut.

The conglomerate says that it will reduce its global workforce of around 117,000 by 6-7%. The job losses, which will be done "primarily by reducing layers of management", will form part of a major restructuring that is designed to produce savings of up to $1.7 billion by 2011. Some $800-$900 million of that figure should be reached in 2010.

The initiatives include "increasing individual spans of control, and simplifying business structures and processes" across the company's global operations.

Chief executive William Weldon said that the job losses, most of which will take place outside the US only represent one component of the cuts, and that this latest round of streamlining was needed "to ensure that our company remains well-positioned and appropriately structured for sustainable, long-term growth in the healthcare industry".

Mr Weldon told investors in a conference call that the restructuring was in response to the "pressures in the regulatory environment and the cost of bringing new products to market".

He said the continuing effects of the global recession could still be felt, with consumers spending less and many have lost their jobs and (in the US) their health insurance cover.

The company forecasts a pre-tax restructuring charge of $1.1-$1.3 billion in the fourth quarter of 2009. The initiative has come just a few months after the loss of 900 jobs at its Ortho-McNeil-Janssen pharmaceuticals division in the US.

That followed a major restructuring the company undertook in 2007, when 4,800 posts were eliminated.

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