CareFusion has initiated a company-wide restructuring. The company expects to generate more than $100 million in annual savings when this initiative would be fully implemented.
The move will result in a substantial cut in medical device jobs.
The restructuring is expected to reduce the company’s global workforce by approximately 700 positions.
The reductions are designed to eliminate layers of management and reduce the size of the company’s supporting infrastructure.
In connection with the restructuring, CareFusion estimates it will generate pre-tax cost savings in fiscal 2011 of $85 million to $95 million and for that amount to increase by an additional $25 million in fiscal 2012. In addition, the company estimates incurring total pre-tax, nonrecurring expenses of approximately $40 million to $50 million in fiscal 2011 related to this restructuring, which includes employee separation and other costs.
David Schlotterbeck, chairman and CEO of CareFusion, said, “During fiscal 2010, we evaluated our cost structure and the strategic fit of certain businesses and are now taking the necessary steps to right size our company. Our goal is to improve our competitive position, accelerate our previously announced efforts to improve our operating margins and enhance our focus on the core opportunities we have for growth.”
Revenue in the fourth quarter increased 19 percent to $1 billion on both a reported and constant currency basis, driven primarily by increased sales in the company’s Infusion, Respiratory and Medical Technologies and Services businesses.
The company said fourth-quarter income fell to $52 million, or 23 cents a share, from $96 million, or 44 cents a share, a year earlier. Adjusted net income was $85 million, or $0.38 per diluted share, and the adjusted tax rate was 33.2 percent for the fourth quarter.
For fiscal 2010, revenue increased 9% to $3.9 billion.
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