9 October 2002
Abbott Labs to cut 2,000 jobs
Chicago –Abbott Laboratories said Wednesday it will restructure its manufacturing, international and diagnostics divisions and cut approximately 2,000 jobs, or 3% of the company's current global workforce of 70,000.
Ironically, at the same time, Abbott reported increases in both sales and earnings for the third quarter ended 30 September. The company said it would incur a one-time after-tax charge of $100 million to $125 million against earnings in the fourth quarter, reflecting the write-down of manufacturing facilities and other assets, and employee severance charges.
Worldwide sales for the third quarter were $4.341 billion, up 3.8% from $4.181 billion in the third quarter of 2001. Net earnings were $720 million, or 46 cents per share, for the three months ended 30 Sept., up from $631.4 million, or 40 cents per share, in the same period a year ago.
"We continue to make progress on our long-term strategic objectives to build a significant presence in higher-growth markets, such as immunoscience and vascular products," said Miles D. White, CEO.
As part of the restructuring plans, White said the company would streamline global manufacturing operations to improve efficiency and to eliminate excess capacity. At the same time, Abbott will invest in excess of $450 million in capital over the next several years to expand current manufacturing facilities and build new operations to support future products emerging from the company's development pipeline, particularly technologies to support potent drug and biologics manufacturing, he said.
In its international operations, White said, the company has identified additional synergies from the integration of Knoll and is responding to difficult economic conditions that are impacting business performance, particularly in Latin America.
Abbott's diagnostics division will also be restructured around its four product lines — immunochemistry, hematology, molecular and blood glucose monitoring. The new structure will create a more agile and customer-focused division, White said, enabling it to meet current business needs, while improving productivity, customer service and new product time-to-market.
"This restructuring will improve our global competitiveness and enhance our ability to invest in promising technologies to advance patient care," White said.
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