Pharmaceutical and medical device manufacturer Hospira Inc. said March 24 it will lay off 10% of its global workforce over the next year as part of a companywide cost-cutting initiative.
The job reductions are expected to save the company $110 million to $140 million. In addition to the layoffs, Hospira will streamline its product line, evaluate nonstrategic assets and reconfigure its organizational structure.
The company indicated in a statement it plans to eliminate redundancies in its inventory.
"Hospira's global product line encompasses thousands of list numbers, or SKUs, many of which represent multiple presentations of the same drug compound and serve the same medical need," the company said.
In addition to improving inventory management and manufacturing efficiency, Hospira said it expects the streamlined product line to produce indirect cost reductions through associated decreases in functional support.
Hospira also is exploring opportunities to improve efficiencies and performance in several functional areas, including global procurement, finance and information technology.
The initiative, called Project Fuel, will result in pre-tax charges of $140 million to $160 million, of which approximately $90 million to $100 million will be incurred during 2009. The total charges for the project include cash costs of approximately $120 million, primarily related to restructuring costs, including employee-separation and other costs, as well as process optimization implementation costs.
