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NEW YORK – Johnson & Johnson said Tuesday it will cut up to about 8,000 jobs and streamline its operations in an effort to cut costs as it braces for changes in the health care industry.
The New Brunswick, N.J.-based company said the cuts will affect 6 percent to 7 percent of its global workforce of roughly 118,700 workers.
The restructuring is one of Johnson & Johnson’s biggest and will prompt a restructuring charge of up to $1.3 billion pretax in the fourth quarter.
Johnson & Johnson plans to simplify its business structure and projects that it will save between $800 million and $900 million next year and $1.4 billion and $1.7 billion annually after the restructuring is complete in 2011.
The company, the world’s most diversified health products maker, saw its revenue fall 5 percent in the third quarter as intensifying generic competition slashed sales of about a half-dozen of its prescription drugs, including the schizophrenia drug Risperdal and the epilepsy treatment Topamax.
Chairman and CEO William C. Weldon said the moves are meant to position the company for long-term growth amid an evolving, and sometimes turbulent, market.
The new restructuring program comes on the heels of management’s decision to reorganize its comprehensive care business in August. That unit was created under a 2008 restructuring program with the goal of boosting sales, though sales were down during the first half of 2009. The unit makes medical devices and tests.
In July 2007, the company set a restructuring program that reduced its workforce by 4 percent, or about 4,800 jobs.
“When you look at the total economic environment, I don’t think anybody knows what’s going to happen,” Weldon said Tuesday. “But nobody expects it to come back tomorrow.”
