September 12, 2014
By Riley McDermid, BioSpace.com Breaking News Sr. Editor
Healthcare giant Johnson & Johnson will reduce pension benefits available to employees hired or rehired after Jan. 1, 2015, a leaked internal memo said late Thursday.
A J&J spokesperson confirmed the memo was sent to employees.
Peter Fasolo, the company’s worldwide vice president for human resources, wrote in the memo that “the changes will more closely align with benefits offered by our competitors and maintain a retirement program that’s above average among our peer companies.”
The move is just the latest effort by J&J to slash costs and reduce overhead in an effort to compete with leaner competitors in an already-crowded pharma field.
The scale back has met with some limited success: Sales in the second quarter of 2014 spiked 9 percent, while earnings edged up 12 percent.
Johnson & Johnson is a blue chip brand which sells a cornucopia of prescription drugs, medical devices and over-the-counter health products.
Fasolo said the move was necessary because the “benefit landscape has continued to evolve in recent years” and “emerging trends” in hiring and recruitment have continued to change across the board.
“More importantly, it will continue to support our efforts to attract and retain talent to drive innovation and growth across our family of companies, helping us manage for the long term,” he wrote in the memo.
But despite a banner year in the pharmaceutical industry, which saw prescription drug revenue jump over 20 percent in the second quarter alone, the pressure is on J&J to compete with companies like the DePuy Synthes medical device unit, which said earlier this year it had eliminated almost all travel.
That move, it said, is part of a goal to lower its costs by 25 percent year-over-year.
