Johnson & Johnson is engaged in a global restructuring effort.
Johnson & Johnson (J&J) is currently consulting with regional and local works councils about the closure of a surgical suture manufacturing plant in Livingston, Scotland, which is run by its Ethicon subsidiary. This could threaten up to 400 jobs and has kindled discussion about what role, if any, was played in this by uncertainty over Scotland’s political and economic future as the UK begins the process of leaving the European Union.
The move is described as part of an ongoing and global restructuring effort dating back to January 2016 and covering its entire medical devices business. This is projected to lead to some 3,000 job cuts worldwide, saving costs of over $1 billion/year. The Livingston site produces about 5-6% of J&J’s sutures and is dwarfed by other plants in Texas, Mexico and Brazil, which can cover any demand currently met by Livingston.
J&J did not formally announce its plans but confirmed in a statement that it had begun the consultation process. “We have put forth these proposals in the interest of reducing complexity and increasing agility to better serve the needs of customers and patients in today's evolving healthcare marketplace,” the company said. “We carefully assessed our options and recognize our proposed plans have the potential to significantly affect our employees, their families and the local community.”
Both the UK and the devolved Scottish government said that they have been working with J&J to find a solution. According to Economy Secretary Keith Brown, Scottish ministers and enterprise agencies had carried out “detailed and intensive” work the company, “looking at what we can do both to help address immediate business challenges, and to maximize the site's future potential”. However, no alternative solution has yet been found that will protect jobs.
The site, near Edinburgh, was originally much larger but in 2003 Ethicon cut some 850 jobs when it moved much of its suture manufacturing to another site in Puerto Rico and needles to sits in Brazil, Germany and the U.S. Coincidentally, J&J also announced plans at the start of 2017 to lay off 80 of the 1,100 workers at a blood glucose meter in Inverness, northern Scotland, as part of a strategic review of its LifeScan blood glucose business and other diabetes brands.
Meanwhile, Ethicon itself has continued to expand on other fronts. The company, which developed the first medical sutures 60 years ago, and also supplies staplers, energy devices, trocars and hemostats, among other things announced in January that it had acquired Megadyne Medical Products, a U.S. medical device company that makes electrosurgical tools. Terms were not disclosed.
This combination, Ethicon said at the time, would be “a major step forward in Ethicon's goal to deliver the most comprehensive suite of intelligent energy solutions that enhance precision and efficiency in the operating room”. Megadyne’s products include monopolar and bipolar electrodes, patient return electrodes, generators and smoke evacuation systems.
