Quest Diagnostics slashing 400-600 jobs to save $65M

Quest Diagnostics ($DGX) is planning to slash between 400 and 600 jobs by the end of next year, part of the company's plan to reduce its spending by $500 million.

The layoffs will save about $65 million, eliminating three layers of management, Quest says. As a result, Quest is simplifying its business structure, consolidating into two segments: Diagnostic Solutions and Diagnostic Information Services. The latter unit will account for the majority of Quest's revenues, the company says, responsible for developing, delivering and marketing new diagnostics.

The move comes after Quest scaled back its revenue projections in the last quarter, citing pricing pressures and a sluggish market for diagnostic testing. The company now says revenue growth will be between 1% and 2%, down from 2% to 2.5%. That's where the $500 million in cuts come in, CEO Steve Rusckowski said.

"The new organization will allow us to aggressively drive operational excellence and improve our customer focus, which will, over time, enable us to restore growth," Rusckowski said in a statement. 

The business realignment, effective Jan. 1, will result in $15 million to $20 million in charges, according to Quest.

- read Quest's statement

Special Report: The 10 Largest Medical Device Layoffs of 2012

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