Johnson & Johnson plans to cut about 3,000 jobs from its global medical device division over the next two years, the company says, in hopes of reviving the flagging business line.
The reductions represent more than 2 percent of the company's global workforce and between 4 and 6 percent of its medical device personnel, who work on devices sold primarily in a hospital setting. The company expects to save up to $1 billion per year before taxes with the moves.
J&J's consumer medical devices businesses, vision care and diabetes care, all of which focus on over-the-counter type products, will not be impacted, according to the company.
“This was really a move about J&J and restructuring our business,” said company spokesman Ernie Knewitz. “Clearly these are not decisions that we as an organization take lightly. We understand the direct impact on our employees. However, we think that this is the best thing for J&J to do in order to continue to grow.”
The medical device business was the company's largest unit, traditionally focused on surgical tools, knee replacements and stents. But J&J exited the stent business in in 2011 and the overall medical device market has slowed to single-digit growth, further hampered over the last two years by the recently suspended medical device tax in the United States.