Johnson & Johnson to cut roughly 3,000 medical device jobs
January 20, 2016
Business Affairs
Medical Devices
Courtesy: Johnson & Johnson
By Gail Kalinoski, Contributing Reporter
Johnson & Johnson is cutting about 3,000 jobs from its medical devices businesses in an effort to save between $800 million and $1 billion and restructure the divisions to “better serve the needs of customers and patients in today’s evolving health care marketplace.”
The New Brunswick, N.J.-based health care giant said the savings will give the company “added flexibility and resources to fund investments in new growth opportunities and innovative solutions for customers and patients.”
The cuts will affect Johnson & Johnson’s orthopedics, surgery and cardiovascular businesses. Its consumers’ medical devices businesses, vision care, and diabetes care will not be impacted by the actions, according to a company statement. A Johnson & Johnson spokesman told Reuters there are no immediate plans to eliminate specific products and did not say what regions might see job losses.
The company estimates the cuts will affect approximately 4 to 6 percent of the medical devices segment’s global workforce over the next two years. In media interviews and company statements, Johnson & Johnson portrayed the restructuring as a way to re-prioritize its resources and focus on new or improving products.
“As a market leader, we are committed to leveraging our breadth and scale to shape the future of the medical device industry, for the benefit of those we serve,” Gary Pruden, worldwide chairman, Johnson & Johnson Medical Devices, said in a prepared statement.
“The bold steps we are taking today are to evolve our offerings, structure and footprint, and increase our investment in innovation. These actions recognize the changing needs of the global medical device market and will deliver more value to our customers, increasing our competitive advantage and driving growth and profitability for our businesses.”
The Wall Street Journal noted that the medical devices business had been the company’s largest segment, fueled by sales of artery-opening stents, knee replacement parts and other surgical products. But the market has slowed due to consolidation of hospital systems where surgeons face more pressure to control prices and have less autonomy.
The company has left the stents business and has also been focusing on high-growth categories like surgical robotics for the United States, Japanese and Chinese markets, the journal reports.
The global medical devices market is now about $320 billion, but growing only about 4 percent now compared to the double-digit increase of the early 2000s. J&J’s medical-device sales were even lower than that average, marking only 1 percent in the third quarter of 2015, according to the WSJ.
Johnson & Johnson is cutting about 3,000 jobs from its medical devices businesses in an effort to save between $800 million and $1 billion and restructure the divisions to “better serve the needs of customers and patients in today’s evolving health care marketplace.”
The New Brunswick, N.J.-based health care giant said the savings will give the company “added flexibility and resources to fund investments in new growth opportunities and innovative solutions for customers and patients.”
The cuts will affect Johnson & Johnson’s orthopedics, surgery and cardiovascular businesses. Its consumers’ medical devices businesses, vision care, and diabetes care will not be impacted by the actions, according to a company statement. A Johnson & Johnson spokesman told Reuters there are no immediate plans to eliminate specific products and did not say what regions might see job losses.
The company estimates the cuts will affect approximately 4 to 6 percent of the medical devices segment’s global workforce over the next two years. In media interviews and company statements, Johnson & Johnson portrayed the restructuring as a way to re-prioritize its resources and focus on new or improving products.
“As a market leader, we are committed to leveraging our breadth and scale to shape the future of the medical device industry, for the benefit of those we serve,” Gary Pruden, worldwide chairman, Johnson & Johnson Medical Devices, said in a prepared statement.
“The bold steps we are taking today are to evolve our offerings, structure and footprint, and increase our investment in innovation. These actions recognize the changing needs of the global medical device market and will deliver more value to our customers, increasing our competitive advantage and driving growth and profitability for our businesses.”
The Wall Street Journal noted that the medical devices business had been the company’s largest segment, fueled by sales of artery-opening stents, knee replacement parts and other surgical products. But the market has slowed due to consolidation of hospital systems where surgeons face more pressure to control prices and have less autonomy.
The company has left the stents business and has also been focusing on high-growth categories like surgical robotics for the United States, Japanese and Chinese markets, the journal reports.
The global medical devices market is now about $320 billion, but growing only about 4 percent now compared to the double-digit increase of the early 2000s. J&J’s medical-device sales were even lower than that average, marking only 1 percent in the third quarter of 2015, according to the WSJ.
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