Abbott cuts 700 US jobs as it prepares for a major restructure

Abbott is cutting 700 jobs in the US and Puerto Rico ahead of a major restructuring of its operations.

The announcement of layoffs came as the company posted steady net profits of $4.73bn for 2011, an increase of 2.2 per cent from 2010, and sales rose to $38.85bn, a 10.5 per cent jump from the year before.

About 200 positions will go at Abbott's Lake County headquarters in Chicago as the company plans to discontinue some of its mature product lines in diagnostics, with another 200 manufacturing layoffs planned for its operations in Puerto Rico.

A further 300 jobs will be lost in a California manufacturing plant responsible for making Boston Scientific Corp's heart stent Promus, sales of which have been falling following the launch of a new stent from Boston Scientific.

Several hundred more jobs are due to be cut in California as well, according to Abbott spokeswoman Adelle Infante, although specific details are as yet unknown.

The cuts are in addition to 1,900 already announced by the company last year.

Abbott is currently undergoing major restructuring as it looks to split into two separate entities.

This will see it spin-out an as yet unnamed company to focus on research-based pharmaceuticals and developing new drugs, while a second company would retain the Abbott name and focus on existing generic and nutritional products as well as medical devices and diagnostics.

“2011 was a significant year for Abbott, with the announced plan to separate into two leading health care companies,” said CEO Miles White.

“We remain on track to complete the separation by the end of 2012,” he added.

Elsewhere in Abbott's 2011 review, the company's profits were affected by $1.5bn costs in litigation reserves for ongoing settlement discussions.

Excluding these charges, as well as other one-off items, such as costs related to the company's Reata and Biotest collaborations, profits would have risen by 12.8 per cent, to $7.33bn.