Layoffs come as company prepares to spin off its pharma division as AbbVie
Abbott is to cut 550 positions, with several hundred more layoffs planned throughout 2013, as the company prepares to split into two separate firms by the end of this year.
The news came as the company posted flat sales for the third quarter of 2012, with growth of its lead product Humira for autoimmune conditions slowing.
Abbott said the cuts will come in its global nutrition, vascular, established-pharmaceuticals and molecular-diagnostics divisions, with both US and European workers affected, according to a report in the Wall Street Journal.
These include 180 jobs at Abbott Nutrition in Sligo, Ireland, as well as 100 more at Abbott's Lake Country headquarters near Chicago, US.
The cuts, which are on top of 700 layoffs announced at the beginning of 2012, would allow Abbott to “better align resources to meet today's evolving business needs", company spokesman Scott Stoffel said.
At the forefront of these plans is the decision to spin off its proprietary pharmaceutical division as AbbVie, while the company's diversified range of medical products, including nutritionals, medical devices and diagnostics, will remain a part of Abbott.
The company's pharmaceuticals division was its biggest in terms of sales during the third quarter of 2012, reporting revenues of $4.42bn – a slight growth of 2.4 per cent from 2011.
By contrast, several divisions that will soon operate separately from this pharma unit, including vascular, molecular diagnostics and established pharmaceuticals, all had a year-on-year sales decline.
Total sales for the company came to $9.77bn during the period, a slight decline of 0.4 per cent from last year, with analysts blaming weaker sales of Humira outside the US for the lack of growth.
Profits were way up, however, with Abbott reporting net earnings of $1.94bn during the third quarter of 2012 compared to just $303m in 2011 when the company was hit by legal charges related to its neurologic drug Depakote.
Other positives of note during the last three months include Humira receiving expanded indications for Crohn's disease and axial spondyloarthritis in Europe, as well as ulcerative colitis in the US, expanding the market even wider for the blockbuster.
"There were several product launches across pharmaceuticals, vascular and diagnostics, which will contribute to future growth. In addition, we remain on track to separate into two leading healthcare companies on January 1, 2013," said the company's chair and CEO Miles White.