Abbott to Layoff 3,000 Employees Following Solvay Unit Acquisition

Giant U.S. pharmaceutical group Abbott Laboratories (ABT) will cut 3,000 jobs, or about 3% of its workforce, following its purchase of Solvay's pharmaceuticals business, media reports indicated. Abbott shares fell nearly 0.3% in late-morning trading.

Abbott, which acquired Solvay's drugs unit last year, announced in a regulatory filing a restructuring plan related to the acquisition. "This plan streamlines operations, improves efficiencies and reduces costs in certain Solvay sites and functions as well as in certain Abbott and Solvay commercial organizations in various countries. Action plans have been identified and most are expected to be implemented within the next two years," Abbott said.

The majority of the savings are targeted to be realized by 2012, Abbott said. The plan will result in total pre-tax charges of approximately $810 to $970 million over the next two years. In addition, Abbott expects to incur one-time integration costs of approximately $135 million in the second half of 2010 and $175 million in 2011. These costs will not impact Abbott's ongoing earnings-per-share guidance in 2010, the company said.

The cuts will take place over the next two years and the vast majority will come from one-time Solvay positions, Reuters reported. Most of the positions to be eliminated will be in sales, manufacturing, research, and corporate staff, Bloomberg added, with the majority of the cuts in Europe. But Abbott will also close the former U.S. headquarters of Solvay's pharmaceuticals unit in Marietta, Ga.

Illinois-based Abbott closed its $6.2 billion deal for the Brussels-based Solvay unit in February. Back then, it said the deal is providing Abbott with a large and complementary portfolio of pharmaceutical products, such as cholesterol treatments, and expanding Abbott's presence in key global emerging markets. Based on the timing of the close, Abbott expects the acquisition to add approximately $2.9 billion to Abbott's 2010 total reported sales, the majority outside the U.S.

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liberalmange

Schlobboob - you are right on the mark with economies of scale and efficiency but the reality is that the "right wingers" are correct in that Obama and his affinity with supporting unions is the number one reason jobs go oversees. My family comes from a long line of coal miners and steel workers so we have a history of union affiliation. Nowadays though unions do nothing but collect more wages from their workers than taxation with no real benefit as there are many protectionary laws. Talk about duplication of effort. So what my colleagues might not have illustrated so effectively is that unions are killing and will kill the American economy if collective bargaining is not put in check. Normally the chicken that squawks the loudest is the biggest problem and in the case of unions and jobs going overseas they squawk the loudest and are the biggest shoulders for the blame.

June 07 2011 at 1:55 PM Report abuse rate up rate down Reply
schlobohmb

The number of stupid posts on this by the dense right wingers is amazing. I think they all posted and never read the article. All Blaming Obama. Let me help with a basic economics lesson. When a BIG company buys another company they do it to achieve some economies of scale. To the dolts who posted here there are overlapping jobs in the two companies. OH MY GOD they both did some of the same things. Who would have ever imagined??? Not to mention most of the job losses are coming in Europe. Reading is fundamental but you folks are hopeless. Here is a better way to spend your time go out in front of your trailers and straighten you Palin/O'Donnell signs they're looking a little crooked.

September 21 2010 at 3:54 PM Report abuse rate up rate down Reply
beemerboxer

More people go down the road to unemployment while this pharmacutical continues to bleed health systems for its products, having eliminated another competitor. My cynicsm is well based; the cost of drugs to treat certain aliments is just plain shocking, especially in the US where our system is heavily abused in a market where private medicine rules and lobbyists abound.

September 21 2010 at 3:39 PM Report abuse +1 rate up rate down Reply
Meadhh

All liberals and Obama know how to do is destroy!!!!! Car Industry, Health insurance industry, manufacturing industry, financial industry, farming industry, construction industry, dining industry, etc etc etc. SOON NOTHING WILL BE FREE ENTERPRISE, IT WILL BE OWNED BY THE GOVERNMENT AND SO WILL THE PEOPLE.

September 21 2010 at 3:19 PM Report abuse rate up rate down Reply
1 reply to Meadhh's comment
Meadhh

All liberals and Obama know how to do is destroy!!!!! Car Industry, Health insurance industry, manufacturing industry, financial industry, farming industry, construction industry, dining industry, etc etc etc. SOON NOTHING WILL BE FREE ENTERPRISE, IT WILL BE OWNED BY THE GOVERNMENT AND SO WILL THE PEOPLE.

September 21 2010 at 3:18 PM Report abuse -1 rate up rate down Reply
1 reply to Meadhh's comment
David

Obuma should be happy, his plan is working perfectly.

September 21 2010 at 2:55 PM Report abuse -1 rate up rate down Reply
1 reply to David's comment
Meadhh

Greed??? You stupid kool-aid drinking Anti-capitalists - How do you think jobs are created, by profits. Why should anyone start or operate a business in the USA with the burden of following all NEW IRA rules, new regulations imposed, cap & trade threats, higher taxes, forced health care. There has to be a reward for dealing with the aforementioned because companies give American jobs not the government.

September 21 2010 at 2:45 PM Report abuse -2 rate up rate down Reply
mhcontain

Apparently they didn't get the Government memo that the recession is over.

September 21 2010 at 2:36 PM Report abuse +1 rate up rate down Reply
marilyn

BUT the reccession is over!!!!!********!!!

September 21 2010 at 2:32 PM Report abuse +2 rate up rate down Reply
iamjah

I guess what surprises me the most is that we still had 3000 jobs left.....Stick a fork in it this thing is done.

September 21 2010 at 1:51 PM Report abuse rate up rate down Reply