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Text size [+][-]  Friday November 20 2009GLOBAL EDITION

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03 Nov 2009 19:24

Pruning, not growing



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Johnson & Johnson said on November 3 it would cut up to 8,000 workers, or 7% of its total employees. J&J expects to generate annual pre-tax savings of $1.4bn to $1.7bn by 2011. The US healthcare conglomerate will take a pre-tax charge of $1.1bn to $1.3bn in the fourth quarter.

The company said the cuts will be achieved "mainly by reducing layers of management, increasing individual spans of control, and simplifying business structures and processes".

 

The US healthcare conglomerate will slash up to 8,000 jobs. Unfortunately, the benefits are likely to be as fleeting as the cuts accompanying giant pharma mergers. That's because it's increasingly tough finding new drugs to replace lost revenue as sales of old products run down.

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