Johnson & Johnson follows industry's job-slashing trend

Implications: Recently Johnson & Johnson announced the cutbacks to improve overall cost structure. Being a Pharmaceutical consultant, I follows industry trend. I think J&J is following the trend since Pfizer, AstraZeneca and Bristol-Meyers Squibb also announced that they would be trimming back staff this year. I think most cost saving will come from pharmaceutical division, HR, IT, and finance. Also I think they should better integrate its Cordis subsidiary. Overall I think J&J is being proactive for the future and adjusting to current drug development issues. I hope these actions will enable J&J to continue investing for future growth and profitability.

Analysis: Recently Johnson & Johnson announced initiatives that are expected to generate pre-tax, annual cost savings of about $1.4 in an effort to improve its overall cost structure. To further explain their initiatives, J&J announced that it would be laying off 3 to 4 percent of its global workforce. The most impacted will be pharmaceutical division, which faces numerous patent expirations, including top sellers such as migraine medication Topamax and antipsychotic Risperdal. J& J expected to file about 9 NDAs by 2010. Johnson & Johnson is the latest Pharma Company to announce cutbacks in operations. Pfizer AstraZeneca and Bristol-Meyers Squibb also announced that they would be trimming back staff. I think that these J&J cutbacks were not unexpected, in light major sales force layoffs at Pfizer and other companies. Pharma companies are trying to balance between maintaining a new structure and teams for products coming out, and maintaining existing products. Overall I think J&J is being proactive for the future and adjusting to current drug development issues. I hope these actions will enable J&J to continue investing for future growth and profitability.