Industry giant Johnson & Johnson, which has claimed inflationary pressure and recession fear, is likely to go ahead with its job cuts plan despite posting profits in their third-quarter earnings.
The profits experienced by the 136-year-old institution were said to be because of strong demand for its cancer drug Darzalex. J&J Chief Financial Officer Joseph Wolk said there is still a possibility of job cuts.
In a recent interview with CNBC, Wolk said that the U.S. healthcare conglomerate is looking at "right-sizing" itself, particularly as it moves from being a three-segment business to a two-segment business through the planned separation of its consumer unit.
That business would be called “Kenvue” and hold many of the company's best-known brands, such as Band-Aid bandages and Tylenol.
He also said that the company was not immune to the effects of inflation on its business and the impact of a strong dollar, despite "healthcare being more resilient" than most industries.
“We’re not immune to some of the economic pressures that are out there just like many companies are facing in many industries. So we’re taking this opportunity to really look at the resources, how we deploy them,” Wolk said.
He also added that various job functions would be affected, although he did not provide a number and said it wouldn’t be a major restructuring. The company will continue to invest in research and development and hire new scientists.
Recently, J&J shares were marginally down in early trading at $166.29, reversing from their premarket gains.
For the third quarter, J&J posted a quarterly profit of $4.46 billion, or $1.68 a share, up from $3.67 billion, or $1.37 a share, a year earlier. Adjusted for one-time costs, J&J’s per-share profit was $2.55.
The company’s MedTech unit, which includes heart devices and knee replacement parts, had sales of $6.78 billion, up 2.1%. Meanwhile, J&J’s consumer-health sales declined slightly to $3.8 billion, as currency effects offset underlying growth in over-the-counter medicines and skin-care products.
In light of recent events where many big tech companies like Meta, Snap, Twilio and more have cut jobs, all eyes may be on J&J over how the historic conglomerate manages amidst the doldrum of inflation.