Johnson & Johnson layoffs hit medtech business, with more than 350 cuts in California

Only a few weeks after Johnson & Johnson was reported to be planning global layoffs amid a restructuring of the infectious disease and vaccine groups of its Janssen pharmaceutical division—and just as a separate wave of layoffs hit the company’s consumer health group ahead of a planned spinoff—the job cuts have now reached J&J’s medtech division.

According to notices filed in California last week in accordance with the federal Worker Adjustment and Retraining Notification (WARN) Act, the company plans to begin laying off a total of 352 workers in the state at the end of April.

In response to a request for comment on Wednesday, J&J issued the same statement it has provided amid other recent rounds of cuts: “As the world’s largest, most diversified healthcare company, we are constantly assessing ways to be more innovative and competitive. We are evolving amidst a rapidly changing environment to better meet the needs of the patients we serve around the world.”

The layoffs come even as J&J reported modest year-over-year growth in its medtech division, raking in more than $27.4 billion in sales for all of 2022, a 1.4% improvement over the previous year’s haul. In the late January earnings report (PDF), the company attributed that increase primarily to its electrophysiology devices, contact lenses and wound closure products.

The bulk of the cuts—comprising nearly 300 jobs—will come from J&J’s Auris Health subsidiary, which makes robotic surgery systems for endoscopy procedures and which was acquired in 2019 for $3.4 billion. Another 47 layoffs will come from Verb Surgical, the robotic surgery startup that began life as a joint venture between J&J and Alphabet’s Verily offshoot but moved solely under the J&J umbrella in 2020.

Also taking less substantial hits from the layoffs are Ethicon, a maker of surgical tools and technologies that has been a J&J subsidiary for more than half a century, and C-SATS, which was acquired in 2018 and has built artificial-intelligence-powered software to improve surgeons’ training and performance reviews.

All of the layoffs are split between two sites in California: one in Redwood City and another in Santa Clara, both cities located in the Silicon Valley region near San Francisco.

According to several of the WARN letters that J&J submitted to California’s Employment Development Department and that were shared with Fierce Medtech by the department, the job cuts are scheduled to take place during the two-week period between April 30 and May 13. They’ll affect a wide range of positions, including R&D engineers, sales reps, manufacturing operators, data scientists and more, according to lists included in the WARN notices.

“We remain committed to treating all impacted employees fairly and providing appropriate support during this time of change. We look forward to coordinating intervention services for our affected employees,” Amanda Wade, head of human resources for J&J’s medtech R&D and innovation division, wrote in the letters.

And those may not be the only cuts to hit J&J MedTech in the coming months. Earlier this week, MassDevice cited several sources both inside and outside the company who reported that J&J has laid out for its employees a restructuring plan that could result in a total of up to 1,000 job cuts.

The devicemaker has yet to publicly share such a plan nor to confirm the reports. But MassDevice pointed to a recent LinkedIn post from Rajit Kamal, worldwide president of the sports medicine and shoulder reconstruction portfolios at J&J’s DePuy Synthes subsidiary, that describes ongoing restructuring within his corner of the medtech business, at least.

“DePuy Synthes announced restructuring this week, as part of which, Sports is being combined with our Trauma and Extremities organization and Shoulder Reconstruction is moving into our Joint Reconstruction organization,” Kamal wrote in Sunday’s post. “I am very confident that the new structure will drive focus and synergy to enable growth for both our Sports Medicine and Shoulder Reconstruction business.”