Johnson and Johnson announces restructuring plans

Johnson & Johnson has this week announced a number of plans to restructure the firm with the aim of achieving annual cost savings of $1.3-$1.6 billion (642-790 million pounds) while guaranteeing continued growth in the future and ongoing investment in business opportunities.

The bulk of the savings sought by the company are to be in its pharmaceuticals unit, with the company reporting that a number of major patent expirations will occur over the coming years.

Johnson & Johnson will seek to reduce its cost base in this segment through the consolidation of a number of operations, while it will continue to invest in its late-stage research and development pipeline and recently-launched compounds.

William C Weldon, chairman and chief executive officer of the firm, said: “Throughout our history, we have always taken a thoughtful, disciplined approach to address the challenges we face.”

Regarding the planned three-to-four per cent reduction in its global workforce as part of its restructuring plans, Mr Weldon claimed that these demanding issues must be dealt with in order to guarantee the long-term strength of the company.

Last month, Johnson & Johnson reiterated its growth strategies, reporting that the broad base of its healthcare operations has placed left the company well-poised for future growth.