J & J trims staff, spending

March 1, 1999

Pharmaceutical Representative

Johnson & Johnson announced it will reduce its workforce and restructure.

More than 4,000 employees - approximately 4% of the company's human resources - were scheduled to be let go during the fourth quarter of 1998. Johnson & Johnson had a total work force of 94,000 before the announcement.

The workforce reductions will not take place in its pharmaceutical sales division, the company clarified. Currently, the company employs nearly 3,000 pharmaceutical sales reps.

According to reports in the Wall Street Journal, 5,800 positions will be eliminated. The majority of the layoffs will take place in its manufacturing facilities. The company also announced that it will close 36 factories.

Altogether, the decision will cost Johnson & Johnson $800 million. The move, the company said, is part of a long-term effort to improve production efficiency and centralize manufacturing functions.

Over time, the restucturing could save the company $250 to $300 million per year. Those savings could be applied to the creation of 1,700 new positions, most likely in the sales and marketing departments.

The restructuring, industry analysts predict, will have little effect on the company's pharmaceutical business. PR