J&J to cut 100 jobs in Ireland

JOHNSON & Johnson has announced plans to eliminate 3-4% of its global workforce of about 120,500 people as part of an effort to improve its cost structure.

The diversified health care company said it expected the cost cuts to generate pretax savings of between

$1.3 to $1.6 billion (€949m-1.16bn) by 2008.

The company said last night that the job cuts had not been broken down to a local level so it is not clear how this will affect its 2,500 employees in Ireland.

J&J has 11 subsidiaries in Ireland including Janssen, DePuy, Vistakon, Centocor, and Cordis. A 4% job cut would eliminate 100 jobs here.

J&J plans to seek savings from its pharmaceuticals division, becoming the latest large drug maker to restructure in response to patent expirations to major products.

The company will also look for savings at its Cordis franchise, where its drug-coated stent business is struggling with safety concerns and competition.

Jeff Jonas, a portfolio manager with Gamco Investors, called the restructuring “very positive,” noting it also comes on the back of a $10bn (€7.3bn) stock buyback plan announced earlier this month.

“I don’t think it’s a sign of desperation at all,” Jonas said. “It’s really just a matter of responding to the reality that’s out there in the marketplace.”

J&J expects to take associated pre-tax restructuring charges of $550-$750m in the second half of the year. It confirmed its prior 2007 earnings outlook of $4.02 to $4.07 per share, which excludes such charges.

“These actions we are taking to improve our cost structure will enable us to continue investing for future growth and profitability,” chief executive William Weldon said.

The J&J restructuring announcement follows others from Pfizer Inc and Merck & Co.