Below is how JnJ is dealing with older employees. It is now common knowledge and being commented on by the press. Alex said JnJs number 1 threat is not from competition but rather from present and future pension liabilities. Still think this is a great company to work for? Now you know why most of the new hires lately have never sold before. Bad news for JnJ is that they won't be selling anything here either as our competition is laughing at this practice with no plans to follow suit.
Tuesday, 01-April-2014: --- Pharm News Wire: "J & J McNeil divestiture announcement"
This morning, healthcare major Johnson & Johnson announced plans to divest their low-performing McNeil PPC OTC business by end of 2Q 2015. CEO Alex Gorsky indicated a strong desire to "sell, wind-down, or otherwise divest" the OTC business that has seen a spate of recalls culminating a so-called FDA consent decree in October 2011. "This comes as no surprise, given the apparent chronic nature of quality problems at the McNeil business unit, frequent leadership shuffles, mounting legal woes from patient lawsuits, multiple investigations by federal agencies and the Department of Justice, and an overall picture of continuing management incompetence" suggested a prominent healthcare analyst on Wall Street. Pharma industry analysts have long derided the McNeil OTC business as the black sheep of J & J's empire.
While details of the divestiture have not yet been made public, with the board keeping plans close to their vests, expect a divestiture plan similar to what was done with the Carlyle Group for other BU sales by J & J. The Carlyle Group for their part expressed no specific interest, stating instead that "their analysts are on the look-out for expanding their healthcare portfolio across business lines".
Regardless of how this all shakes out, one thing seems certain - J & J is driving to slim down their bloated, ageing, pension-hungry payrolls, get out of low-margin problem business lines, and get rid of their huge pool of low-performing, over-compensated employees.
----PNN