Johnson & Johnson (J &J) has begun a restructuring initiative, which will eliminate positions in the range of 6 to 7 percent of its global workforce of 120,000 in an effort to cut costs through 2011.
The New Brunswick, N.J.-based company expects to record an associated pre-tax, restructuring charge in the range of $1.1 billion to $1.3 billion in the fourth quarter.
Earlier this year, J &J cut about 900 jobs from its U.S. pharmaceutical unit, and in August it consolidated its management structure.
The company anticipates that its plans are expected to increase its operational efficiency and generate annualized, pre-tax cost savings of $1.4 billion to $1.7 billion when fully implemented in 2011, with $800 million to $900 million expected to be achieved in 2010.
According to J &J, position eliminations will form only one component of the savings. “These types of changes are difficult under any circumstances, and will have a very personal impact on people,” said William C. Weldon, J &J’s chairman and CEO.