Human Capital & Careers

Views to a Layoff: J&J, Monster Reorganize

The maker of health-care products will cut 5,000 jobs; the online employment advertiser plans to cut 15 percent of its full-time staff.
Stephen TaubJuly 31, 2007

Johnson & Johnson said it could eliminate nearly 5,000 jobs as part of a sweeping reorganization designed to save $1.3 billion to $1.6 billion annually in 2008.

Specifically, the manufacturer of health-care products said it would cut its worldwide workforce by 3 percent to 4 percent. It currently employs 120,500 people.

Most of the cost savings will take place in the pharmaceuticals segment, which the company said faces significant patent expirations over the next few years, and in the Cordis franchise, which competes in the drug-coated stent market.

The company promised to “minimize the number of employees who are affected” by using attrition and hiring freezes in certain areas of the business.

J&J is not the only company to announce major layoffs this week. Monster Worldwide Monday said it plans to cuts its workforce by about 800 people, or 15 percent of its full-time staff. The cuts will come as part of a wider reorganization aimed at reducing its operating-expense base by $150 million to $170 million a year.

The online employment company also said that in the second quarter, its $29 million in income from continuing operations take into account pre-tax expenses of $5.3 million for legal and professional fees spawned by external probes of the company’s stock-option-grant practices and $15.8 million of previously disclosed severance costs for former executives.

Last December, Monster announced a charge of $339.6 million for stock options granted between 1997 and March 31, 2003 after a special committee determined that a “substantial number of stock option grants” had an incorrect exercise price stemming from incorrectly dated grants.

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