Johnson&Johnson China's multiple product lines have been exposed to layoffs.
According to media reports, this layoff involves multiple departments, with a scale of 20%, among which the surgical department has more layoffs. Employees under 3 years old will receive N+1 compensation, employees between 3 and 6 years old will receive N+2 compensation, and employees over 6 years old will receive N+3 compensation.
This news has attracted widespread attention in the industry. Regarding whether the layoff news mentioned above is true, a reporter from Beijing Business Daily attempted to call the contact number disclosed on Johnson&Johnson China's official website, but no one answered the phone.
It is worth mentioning that there have been recent reports that Johnson&Johnson China has made organizational adjustments to its surgical division. Starting from January 1, 2025, the Surgery Division will be reorganized into six major departments: Minimally Invasive and Energy Surgery Division, Wound Closure Division, Biosurgery Division, Surgical Product Expansion Division (i.e. Wide Area Market Division), Strategic Marketing Division, and Robotics and Digitalization Division.
According to data, Johnson&Johnson (J&J) originally owned products covering personal care, healthcare, and other businesses such as Big Baby, Johnson&Johnson Baby, Neutrogena, Tylenol, Bondi, Dr. Uno, and Lee Sedol. However, since the group split its consumer health business in 2021, it has focused on two major businesses: medical technology and innovative pharmaceuticals. The consumer health business has become an independent company, Kenvue, and will be listed on the New York Stock Exchange in 2023.
According to reports, Keda also has plans to lay off employees. The company announced in May this year that its board of directors had approved a measure to lay off 4% of its workforce globally, aiming to improve organizational efficiency and better position Keda for future growth.
Behind the layoffs, the performance pressure of Johnson&Johnson cannot be ignored. According to Oriental Wealth, as of September 29th, Johnson&Johnson's total revenue for the first three quarters was $66.3 billion, a year-on-year increase of 3.98%. However, the attributable net profit decreased significantly, reaching 10.64 billion US dollars, a year-on-year decrease of 65.81%.
Layoffs, as a means of reducing costs, may alleviate Johnson&Johnson's financial pressure in the short term, but whether this decision will have adverse effects on the company's long-term business layout and development remains a matter of concern. Industry insiders point out that layoffs may affect the company's innovation capabilities and market competitiveness, especially in industries such as healthcare that heavily rely on talent and research and development.
For Johnson&Johnson, layoffs may be part of its global strategic shift. Against the backdrop of increasing global economic uncertainty, multinational corporations are seeking to address challenges by optimizing resource allocation and improving operational efficiency. However, how to maintain innovation and competitiveness while reducing costs is a problem that Johnson&Johnson needs to carefully weigh.
In addition, Johnson&Johnson also faces fierce competition from domestic pharmaceutical companies in the Chinese market. With the rise of domestic pharmaceutical companies, related enterprises have demonstrated strong competitiveness in terms of price, policy support, and local market adaptability, which poses significant challenges to multinational companies such as Johnson&Johnson.
For example, an iON bronchoscope robot from Intuitive Fosun has also been approved for market, directly competing with Johnson&Johnson's recently promoted surgical robot product MONARCH. Johnson&Johnson, which once held a 95% market share, has seen a significant decline in market share, while domestic companies such as Mindray Medical are rapidly seizing market share.
During an interview with Beijing Business Daily, Yu Xi, Chairman of the Communication Planet App, stated that under performance pressure and fierce market competition, Johnson&Johnson may need to re-examine its strategic direction, adjust its business structure, optimize resource allocation, and adapt to the new market environment.