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J&J To Cut Medical Device Jobs

Johnson & Johnson announced that it would be cutting about 3,000 jobs from its medical devices division, the Wall Street Journal reports.

This, it adds, represents some 6 percent of that division or nearly 2.5 percent of the company's overall workforce of 127,000. The company says the move will save it between $800 million and $1 billion a year, before taxes.

Wells Fargo analyst Lawrence Biegelsen says that medical devices have been "one of the weaker performing businesses in recent years," according to the Associated Press. Globally, the Journal adds that Frost & Sullivan's Venkat Rajan says that the medical device market is now growing at about 4 percent a year, down from double-digit growth in the early 2000s. But, J&J's sales, the Journal notes, have slowed more than the overall market.

J&J has also been re-focusing its medical device business, it says. The company has stopped selling stents and has begun to focus on higher growth categories and markets like the US and Japan. The company has also entered into a partnership with IBM to develop virtual coaching for patients and into one with Google parent Alphabet to develop surgical tools based on advances in imaging technology.

The cuts are "an opportunity to reshape our business to accelerate growth through meaningful innovation," Gary Pruden, the chair of J&J's medical device unit, tells the Journal.