Johnson & Johnson is planning to close a surgical suture production plant, potentially putting 400 people out of work. The shuttering of the Scottish facility will see J&J move production to larger sites in Texas, Brazil and Mexico to further its goal of cutting costs by $1 billion a year by 2018.
J&J revealed plans to lay off 3,000 people from its medical devices unit to lower costs at the start of last year, but held off on saying exactly where the ax would fall. Now, the 400 workers remaining at J&J’s Ethicon site in Scotland have learnt their employer sees the suture facility, which accounts for less than 6% of the company’s global capacity, as surplus to its needs.
“We have put forth these proposals in the interest of reducing complexity and increasing agility to better serve the needs of customers and patients in today's evolving healthcare marketplace,” J&J said in a statement.
Locally, the action is happening against a backdrop of concerns multinational companies will leave the United Kingdom in response to Brexit. J&J’s proposal is motivated by other factors, but the timing is bad for a U.K. government keen to show the country remains attractive to global companies.
Currently, J&J is discussing the future of the plant and its employees with the Scottish and U.K. governments and local officials. Despite the government trying to find a way to keep Ethicon in Livingston, J&J looks set to shutter the site. The remaining question is whether J&J and the government can find a buyer for the facility and save some of the 400 jobs now under threat.
The proposed closure comes 14-years after J&J axed 850 jobs in Scotland as part of a restructuring that closed facilities in Edinburgh and Livingston and moved suture production to Puerto Rico and needle manufacturing to Brazil, Germany and the U.S.
More recently, J&J began this year by disclosing plans to lay off 80 people at its 1,100-person blood glucose meter operation in the Scottish city of Inverness. News of the cuts at the Inverness site broke at the same time as J&J revealed it is conducting a strategic review of its LifeScan blood glucose business and related diabetes brands. The review could see J&J parcel the brands up into a new business or sell them outright.