Abbott Labs Axes 550 Jobs

Abbott Labs Axes 550 Jobs

October 18th, 2012 // 3:38 pm @

On the eve of its planned split into two companies, Abbott Laboratories is eliminating about 550 jobs from various locations, mostly in the US and the rest primarily in Europe. And several hundred more positions will shed throughout next year, a spokesman tells us. The jobs will be cut from the nutrition, vascular, established pharmaceuticals and molecular diagnostics businesses.

This is the second time this year that the drug and device maker has eliminated a large number of jobs. In January, Abbott (ABT) cut 700 jobs from its device and testing units amid a decline in orders for artery-opening stents (see here). Abbott, which employs about 90,000 people worldwide, is taking an after-tax charge of $406 million associated with restructuring.

Indeed, the cutbacks are not surprising in light of the upcoming spin off. Late last year, Abbott decided to split into two publicly traded companies. One will focus on devices, diagnostics, nutritionals and, outside the US, branded generics. The other will be a so-called research-based pharma that will feature a portfolio of existing meds, such as Humira and Synthroid, along with a pipeline of some 20 compounds in Phase II or Phase III development (read here). However, an Abbott spokesman insists the layoffs are unrelated to the spinoff.

The spin off will be called Abbvie and headed by Richard Gonzalez, who recently figured in a scandal. Abbott somehow misstated that he held a bachelor’s degree in biochemistry from the University of Houston and a master’s degree in biochemistry from the University of Miami in government filings, on its web site and elsewhere. The inaccurate info was misstated in at least nine regulatory filings between 2002 and 2007, during which he was chief operating officer, among other things.

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