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Abbott Plans 3,000 Job Cuts

Tue, 09/21/2010 - 7:28am

NEW YORK (AP) — Abbott Laboratories says it will eliminate 3,000 jobs and take almost $1.3 billion in charges over the next two years as it integrates its Solvay pharmaceuticals business.

The North Chicago company says it expects $810 million to $970 million in restructuring costs and $310 million in integration costs. The charges include severance costs, write-down and depreciation costs, and expenses related to the end of some research and development programs and the transfer of other programs.

Abbott says it will cut jobs in manufacturing, commercial operations, research and development, and staff functions. Most of the jobs that will be eliminated are based in Europe, and almost all of them are part of Solvay's operations.

Abbott completed the $6.6 billion deal for Belgium-based Solvay earlier this year.

THIS IS A BREAKING NEWS UPDATE. Check back soon for further information. AP's earlier story is below.

NORTH CHICAGO (AP) — Abbott Laboratories said Tuesday it could take close to $1.3 billion in charges over the next two years as it integrates its new Solvay pharmaceuticals business and eliminates some jobs and programs.

Abbott announced a restructuring plan intended to streamline its operations and cut costs. It said the restructuring will lead to $810 million to $970 million in one-time pretax charges in the next two years. That includes $650 million in employee-related costs, $105 million in write-down and depreciation costs, and $215 million in costs related to the end of some research and development programs and the transfer of other programs.

In February, Abbott acquired the pharmaceutical unit of Belgian chemicals maker Solvay for $6.2 billion. The deal gives Abbott access to markets including Eastern Europe, Latin America, and the Middle East, and Abbott said it would improve its sales by about $3 billion per year. It will also add about $500 million to its research and development costs.

Abbott expects to take $430 million in those charges in the current quarter and another $45 million to $210 million in the fourth quarter.

Abbott also expects $135 million in separate one-time costs related to the Solvay unit's integration in second half of 2010, and $175 million in 2011.

Abbott has said the Solvay deal would add 10 cents per share to its profit in 2010, more than 20 cents per share in 2011, and larger amounts in subsequent years. Those estimates exclude one-time costs.

Shares of Abbott lost 20 cents to $52.06 in morning trading.

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