J&J to Cut 6-7% of Workforce

Johnson & Johnson (JNJ 59.49) said Tuesday that it will implement restructuring efforts that eliminate 6-7% of its workforce, resulting in a charge of just over $1 billion in the fourth quarter.

Johnson & Johnson said its plans are expected to increase operational efficiency and generate annualized, pretax 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.  The company expects to record an associated pretax restructuring charge in the range of $1.1 billion to $1.3 billion in the fourth quarter of 2009.

Cost savings will be achieved through reduced layers of management and simplified structures and processes across Johnson & Johnson's global operations, the company said.

In addition, Johnson & Johnson confirmed its full year 2009 earnings guidance of $4.54 to $4.59 per share, excluding special items.  The consensus estimate currently stands at $4.58.

Shares of JNJ are about 1.4% higher about 30 minutes ahead of Tuesday's opening bell.