Biotech Values

[DewDiligence]

Abbott to Cut 1,000 Jobs

http://blogs.wsj.com/health/2008/08/21/layoffs-update-abbott-to-cut-1000-jobs

›August 21, 2008, 3:29 pm
by Jacob Goldstein

Abbott Labs punctuated the August doldrums today with this SEC filing describing a plan to “streamline global manufacturing operations.” That turns out to be code for closing a manufacturing plant and cutting jobs, Dow Jones Newswires reports.

The plant, in South Pasadena, Calif., is part of the company’s diagnostics business and will close some time in the next couple years. Other diagnostics manufacturing jobs will be affected in Santa Clara, Calif., and Lake County, Ill., a company spokeswoman told Dow Jones. In all, the company plans to cut about 1,000 in its diagnostics business.

This move puts Abbott in good company: Since last summer, Merck, Wyeth, Bristol-Myers Squibb, Johnson & Johnson and Amgen have all announced plans to cut jobs.

Abbott nearly sold its core diagnostics business to GE for $8 billion, but the deal fell through in July of last year. At the time, we noted that the company had received an FDA warning letter a few months earlier about problems in a factory that made tests to analyze blood and urine.

Abbott now plans to shift some operations, including manufacturing drug and urine tests, to Europe, in order to be “closer to a large base of customers,” a spokeswoman told Dow Jones.

The company will take charges of $370 million to put the plan into place, and expects to save $150 million a year once the changes are made.‹