Johnson & Johnson re-structure to save at least £562.5m

Johnson & Johnson has announced restructuring actions in its medical devices businesses, including plans to reduce its medical division workforce

The company said it is undertaking actions to strengthen its go-to-market model, accelerate the pace of innovation, further prioritise key platforms and geographies and to streamline operations.

Johnson & Johnson is also planning to reduce its medical device division's global workforce between 4% and 6% over the next two years.

These actions are expected to result in annualised pre-tax cost savings of £562.5m ($800m) to £703m ($1b), the majority of which is expected to be realised by the end of 2018, including approximately £140m ($200m) in 2016 according to the company. 

Gary Pruden, worldwide chairman, Johnson & Johnson Medical Devices, said: "As a market leader, we are committed to leveraging our breadth and scale to shape the future of the medical device industry, for the benefit of those we serve.

"The bold steps we are taking today are to evolve our offerings, structure and footprint and increase our investment in innovation. 

“These actions recognise the changing needs of the global medical device market and will deliver more value to customers, increasing our competitive advantage and driving growth and profitability for our business."

In connection with its plans, the company said it expects to record pre-tax restructuring charges of approximately £1.4bn ($2bn) to £1.68bn ($2.4bn), of which approximately £421m ($600m) will be recorded in the fourth quarter of 2015.  

The company's Consumer Medical Devices businesses, Vision Care and Diabetes Care, are not impacted by these actions.