The real meaning of J&J’s layoffs
by Jessica Shambora
We keep hearing how the economy is improving, but with U.S. unemployment at 9.8% and rising, the job market gives us nothing but anxiety. Today Johnson & Johnson (JNJ) added to the pain by announcing layoffs of 6-7% of its workforce. That’s about 7,000 employees.
While J&J faces lots of industry-specific challenges–patent expirations, increasingly complex regulation, healthcare reform–the news is stunning. Particularly because J&J is known for its legendary credo that puts employees above communities and shareholders–second only to customers in terms of management’s priorities.
CEO Bill Weldon talked with me at length about this–the eminence of J&J’s employees–in interviews that I did with him last Spring. He told me that he says to his employees: “I guarantee we will fight for every one of you that works in this corporation. Does that mean we can always protect every job? Absolutely not. What it does mean is we’re going to do the best we possibly can to ensure we take care of the people that have made the company what it is and fight the battles every day.’”
Assuming that Weldon and J&J’s board haven’t abandoned the company’s age-old credo, might today’s layoffs be a sign that J&J’s fortunes have turned dramatically worse than Weldon anticipated?
“Investors have been asking all day, ‘Is there something worse environmentally than we understand–or than what J&J has relayed to all of us?’” says analyst Rick Wise, who follows the healthcare industry for Leerink Swan. J&J stock closed at $58.93, down nearly 2% for the day.
Wise, who rates the stock “neutral,” says that some investors view the cuts as a desperate grasp for profit growth. But he believes that as a traditionally conservative industry leader, J&J is simply trying to get ahead of the curve in responding to challenges.
“Would J&J have been in trouble today if they hadn’t done it [announced layoffs]? Hard for me to believe,” says Wise. The layoffs, he adds, give the company more freedom and flexibility to invest in areas that management has talked about, like treatments for Alzheimer’s.
J&J’s harsh action leaves many questions unanswered. To me, the two most compelling are: Is this another example of prescient management at the much-admired 123-year-old company? Or are the changes in the world so severe as to force a 123-year-old company to let go of its precious credo to take care of its employees?
For more on J&J’s legendary culture, read a piece I co-wrote with Geoff Colvin earlier this year, “J&J: Secrets of Success” and check out my interview with J&J CEO Bill Weldon below.
Im Sure the polish and Ukranian managers will be far nicer when the plant moves over there as you obviously want it to. too many jobs in limerick anyway
Hello, this is the real Eddie here and I can assure you that I did not write the second post that is attributed to my name. I stand by everything that was in my original posting. Obviously senior management in Vistakon are having fun impersonating people on line. I suggest they stop spending all their time browsing the internet and start doing some real work for a change. Maybe the bullying is a symptom of all the spare time they have on their hands!! This type of internet misuse on company time would certainly not be tolerated by any of the ordinary workforce.
Looking at Jim’s retraction. To me it looks like the management in Vistakon wrote this. If this is the way they run a business they need to rethink there attitude on staff
Bulling is the main management style in limerick i have worked there six years and have seen some form of it every day. everyone knows the people who are doing it but it is just ignored.take a certain ops engineer on
shift
I would like to add some facts to the Unsubstantiated comments made about Bullying and Intimidation in Vistakon Limerick.
Fact 1
Bill Weldon contacted Management of Vistakon limerick following “Jims” comments.
Fact 2
Upper Vistakon Management called a meeting with middle & Lower management to “Discuss” the Issue
Fact 3
Employees were made aware of the situation and “educated” as to the depth of the “Atrocity” that “Jim” had committed.
Fact 4.
Jim & Eddies Initial comments were withdrawn.
From the Facts above would an Impartial observer think that:
A) Management were concerned about the possibility that Bullying or Harassment was taking place in their facility and were implementing some mechanism to investigate if allegations were founded or not?
OR
B) Management Instigated a “WITCH HUNT” to find and discredit Jim & Eddie.
Unfortunately the evidence points to the latter as NO communications were sent to employees to state an investigation was underway.
Also I would like to point out the wording of both Jim & Eddie’s withdrawal of initial comments – they are very self demeaning – citing obvious major Personal problems.
These Retractions were either not carried out by Jim & Eddie or if they were they would appear to have been done so under severe Duress. – Either way it gives you an insight into how management at Vistakon Limerick works.
As in some previous comments I agree that not all management are engaged in these tactics but ALL are aware of them as they are so widespread and if they do not practice them themselves they are surely as guilty as those who do by turning a blind eye to it.
I am calling on Bill Weldon (if he indeed cares about the J&J Credo) to Personally visit the Vistakon facility as a matter of urgency and meet in confidence any employee who would like to air their views to him personally
I like to deal in facts so here are a few more for you
Q. Was I bullied in Vistakon Ireland?
A. YES
Q. How did the incidents make me feel?
A. Stupid – Foolish – different – alone – incompetent
Q. Were the Instances as “Jane” states treated “seriously”?
A. Sadly – NO
I agree with other commentators that point out that Vistakon Management make employees feel like they are Lucky to have a job at all and as a result you surrender your Dignity and Submit to their will.
It is encouraging to see that some Employees are Voicing their Opinions here – Maybe it is not the correct place or maybe due to sheer frustration and lack of alternatives employees are forced to resort to this medium.
Does it not point to something being very wrong in Vistakon Limerick that even one employee writes of Being Bullied & Harassed at work? And more are backing up these claims! If only a few people have the courage to Write our experiences here my main worry is HOW MANY OTHERS ARE SUFFERING IN SILENCE? & CAN IT BE STOPPED?
Q. Do we all that write negative comments about Vistakon have Serious Personal Problems that drive us to this callus act?
A. Statistically Unlikely!
Q. Will I retract my comments here?
A. NO. If there is a retraction I can Now assure you that it will NOT be penned by my hands!
Q. How can you as a reader help us in Vistakon?
A. Add a comment of support! Maybe through people power we can get change for the better. Even if it’s as simple as “Investigate Vistakon Limerick”
“Jim” Thank you for your courage in opening “Pandora’s box” Let’s hope that the lid is not replaced on it before your endeavours are rewarded.
Thank you for your time.
Management in Vistakon Limerick are a crowd of self serving over achievers, as a general rule. They, generally, do not have comparable management qualifications (or behaviors) of managers of other large companies. Their goal is to protect themselves by bashing those below them.
The company can survive and prosper with these “leaders” due to the extremely strong J&J brand and the impressive product development in America. The Limerick operation gets brilliant products and a huge budget so even the mediocre thinking of Limerick management can deliver the results.
Unfortunately, overachievers tend to be paranoid of their own “success” and incorrectly take on a bullying strategy for self protection. It is this misconstrued and aggressive behavior that has lead to the notorious culture in Vistakon in Limerick, Ireland.
I have to agree with what eddie and jim said in his original comment. Obviously from jane’s comments she works in the office/management side of vistakon if she thinks that bullying and harassment are not tolerated. I have been at the receiving end and seen at first hand the different “tactics” that are used by management. It happens everyday in vistakon and especially on the production floor where production is foremost to everything else and employee welfare would definitely be at the lower end of managements thinking. While there might be signs up around the company saying that employees welfare is foremost what is written and what is actually happening are 2 different things. The reputation that vistakon has in the wider community around limerick is not very complimentary. While I do not want to tar all the management with the same brush the good one’s can be definitely counted on your 2 hands or maybe even 1. The amount of begging and groveling and spin that is put on stories by management before a Credo would not be believed by people until they experience it themselves.
This is Eddie here again and I am just writing in to say Vistakon management are not that bad really. I read through my previous post and realised that it was harsh. I am under a lot of pressure at the moment. The managers are doing their best to keep the factory running and to keep everyone’s family supported. We are working hard to avoid any job losses and will come out of these challenging times.
Drive on
I don’t know who John and Jane from Limerick are, but they obviously sent Jim off for some spelling and diction coaching since his first post.
I worked for Vistakon in Limerick and during my time there witnessed a level of bullying and intimidation I have never before seen in any other plant in which I have worked. One thing strikes true though in “Johns” posting, his comment ” I have a family to rear and Im happy to do my bit.” in other words “You’re in Limerick in a recession and you’re damn lucky to have a job” is the stick they are using to beat/threaten both permanent employees and contractors into submission.
Employees in Vistakon Limerick are probably expected to work the longest hours in the industry for one of the lowest pay rates in the industry. Bonuses are nearly always tied to unachievable targets and usually to group rather than individual performance so that no control is possible by the individual.
Vistakon (or Fistakon as it is affectionately known in the recruitment sector) has one of the highest staff turnover rates of any company in Ireland.
The credo, written in every language under the sun, is hanging on the wall in every part of the plant. Maybe the problem is that nobody can find the version in English?
Having had time to reflect on my previous statements down below I wish to withdraw them fully and just to say that I have told lies about this great company of ours that is jnj. I am ashamed to have come on here, and at the time I took my built up anger and ongoing frustration out on a flag ship company in this way.That now famous script (credo) is our light in the dark. To my work mates and friends what can I say, I feel I have left you all down. To John and Jane I want to Thank both of you for your thrust worthy contributions and to repeat only what you have already said on here, ie.there was no bullying or harassment of any sort taking place. To the Management who are and have always worked tirelessly for the better of this company, I take my hat off to each of you. Limerick and Ireland are far better places because of all of your efforts. A lot of good work has been done over the years to make this company what it is today, I only hope that I have not damaged that good work in any way by coming on here foul mouthing and dragging our good name through the muck. Also I hope to deal with the many issues in my own personal life at the moment and hopefully move on from where I am at this point. Thank you all for your time and patience and again Sorry.
I agreed with “John” and I am afraid that “Jim” from J&J Ireland is talking a load of rubbish. I also work for J&J Ireland and feel that the comments by Jim were totally unfounded. Management here are definitely under pressure to try and maintain productivity and cost savings to meet the current economic crises. But bullying and Harassment have never been tolerated within J& J and never will. We all are working hard to maintain the business and to keep competitive. Yes the pressure is on but we are all under the same pressure to streamline and cut costs, we have lines down but management are doing everything humanly possible to continue to keep Jobs and are keeping us informed of the changes that are ongoing. Comments like’s “Jim’s” are unwarranted and not based on facts and in the end, could end up damaging the hard work that is being undertaken to ensure that J&J have a long and productive history in Ireland.
“JANE”
heard about this blog today at work in Vistakon in Ireland.
My ‘friend’ below is talking rubbish. Yes its not easy here, but I see lots of lines down and nobody laid off. In other factorys in Limerick they would be rushing us to the door. Thats Credo enough for me. I have a family to rear and Im happy to do my bit. The investment here seems to keep going despite the recession.
Dell walked out of Limerick ealrier this year and put 3,000 on the dole.
‘John’
I am definately not surprised. I currently work for a J & J company as a temporary employee. It is a shame how many temps are present here, with no benefits, making WELL under 38K, and treated as if we do not exists. A shame that we educated, experienced “employees” are subjected to this. So once again, it is no serprise that they are laying off permanent employees to possibly replace them with temps. J & J shows no loyalty to the hard working, under paid employees that keeps their complany running.
I was recently laid off by J&J. I received a small package for almost 10 years of service. I have to say that management is top heavy across the board. J&J treats their employees (especially Legacy Pfizer employees like the unwanted stepchild). It hurts that I won’t have a job with them and will have to spend the holidays looking elsewhere for work. At least now I can apply to Pfizer.. after all I was always categorizes as a Pfizer person all along. Yes, I am hurt – but not surprised.
The Credo is not just a statement of social responsibility. It is also a management vision, reflecting a strong belief that having a good ’society’ in the company is vital for its success.
In that sense, J&J has abandoned the credo. In the last years, its employees have become increasingly alienated, and J&J is no longer a happy company. The relation between management and employees is now almost entirely adversarial, and the result has been a very serious decline in internal R&D productivity.
The downsizing of J&J does nothing to improve internal productivity, but it does reduce the losses and puts more money in its pockets to compensate this failure by buying drugs from smaller biotechs.
It’s not decentrilization, it’s really all about acquiring other company patents by buying them out and then spitting out what JNJ does not want! Good luck to Guarabo. I don’t think you will succeed under Veronica!
Weldon purchased a 7.5 million dollar home the week before the layoffs. That doesn’t seem very compassionate to his employees.
Alex is absolutely right when he writes that the American economy has to change. J&J caters directly to the consumer, but we have 17.5% real unemployment in the US !!. What would one expect them to do ?. The rest of the world, where J&J manufacture and sell their products, is not much better. This has nothing to do with the CEO salary. J&J’s profit margin barely changed over the past year (up 0.2%) – how can you raise employees salaries, and preserve jobs ? They have to compete with other companies in the marketplace, and if you don’t make the right moves, you lose, and then more people will be out of a job. It’s actually pretty simple. To ‘fix’ many of J&J’s current problems means to fix the American economy fist, and not through acts such as health-care reform…
I think there are many issues here. As a former JnJ employee I know that they are a very responsible and conservative company. I also know that they are a publicly traded company. Although their credo does put patients and employees before stake holders, in the end it is the stake holders that have the gold card. I think the big picture is that if a company like JnJ is starting to see difficulty, its only a matter of time before things will get extremely difficult for everyone.
The problem today is really the publicly traded company idea. They aim to provide the best return for investors. In order to do so they find ways of “doing more with less” i.e. outsourcing to lower cost. Although it puts more money in the share holders pocket, its like pulling the drain plug in the US economy and letting the money flow into other countries.
Also CEO salaries are a bit posh these days. Bill Weldon is a very smart man in a very significant position. I believe that he should be compensated well for his responsibility and hard work. But “well” doesn’t necessarily mean he needs $30mil/year. Im not saying he doesn’t deserve it but the last I remember, Warren Buffett only pays himself something like $100,000 a year.
Bottom line the American economy needs to have significant changes or young American such as myself (23) aren’t going to be “proud to be Americans” anymore.
John from Ireland…I work for Vistakon Ireland.(Limerick).I aggree that the Credo is not worth the paper its written on. Maybe it is for the Fat Cats at the Top,and im sure it is.In my opnion its just one big smoke screen of a statement.The amount of Bullieing and Harassement that goes on at our plant is Unreal,and Management know about it but just turn a blind eye because of the fact of that big stick is quoated time after time,,,Our credo,,just a smoke screen as iv already mentioned.There are 600+ working in our company,in the past 10 years over 400 have left because of the way they treat their employees.And you tell me that the so called credo works….?I really do belive that their is a lot of corruption from the top down,,ie the management only look after themselves as has been already stated in other comments here.
What to know the real reason why they’re laying off employees besides poor leadership and a lack of real vision for the future of the industry? It is the irrationale pay scale that is awarded for top executives. There is no rationale reason for the enormous disparity of salaries. http://www.philly.com/philly/photos/062509_top25_ceos.html This is a rip-off to the real hard working employees who sacrifice much more and to the shareholders who see their dividends continue to shrink.
Yes they are abandoning the Credo. It is nothing but lip service. When it is convenient to bring up, they do, when it is not, they do not. All abuot the profit. If J&J is truly concerned about the future of J&J, then maybe they can reduce the Sr Managements bonus and salary structure. Funny how J&J has one bonus percentage for all companies, but that doesn’t apply to Weldon and the Board, who receive significantly more. Real Ethical…
J&J is known for its legendary credo that puts employees above communities and shareholders–second only to customers in terms of management’s priorities.
Couldn’t be more wrong. The credo is a plaque on a wall. True, the employee paragraph is second, but management governs by the last paragraph and shareholder value. Period.
Neither J&J Management or employees is abandoning their Credo! Those people being layed off understand that J&J is taking the steps necessary for J&J to remain a viable company in the future for it’s customers, employees, and shareholders.
As a shareholder, and an employee who could be layed-off, I know that J&J management is abiding by our Credo. Employees are treated fairly and we all understand that J&J, like any other company in the world, cannot guarantee us life-long employment.
What J&J and it’s employees do guarantee is that they will continue to provide products that will help people live happier, healtier, and longer lives.
With Chuck Prince on the J&J Board why are you wondering about the reason for the recent lay offs. Mr. Prince destroyed Citi Bank, he is one of the key people sited for the global economic down turn and at the 09 Annual Meeting Mr. Weldon referred to “Prince” as one of his “most trusted advisors”. The only question is why the business press does not question the role “Chuck Prince” is playing in the cultural change and business decisions at the top of J&J. The influence of a wall street hack is obvious in the latest lay offs, the recent changes in internal HR policies and in the fact that Weldon is becoming more and more tone deaf. The Credo is dead at J&J and so is the culture of valuing employees, Chuck Prince lives to destroy another company and industry. Shame on Weldon for not accepting Prince’s resignation from the J&J Board after he was fired from CITI Bank
As a former JnJ employee, I can say that they do try to protect their employees. Many of those “laid off” will be offered extremely nice packages, others will have the opportunity to move to other divisions and companies within the corporation. This article is alarmist and not at all helpful. As with other lay-off periods (and there have been some) JnJ is repositioning itself – moving its focus from one area of pharmaceuticals to another. I do wish the media would stop making mountains out of grains of sand!
Where is the accountability from the top? J&J is no different than any other company. They hire people from other company’s that have destroyed peoples lives(Christine Poon). She has failed everywhere she goes. All of these pharm company’s lived high off the hog and now middle management and reps are paying the price. Weldon just purchased an 8.5 million dollar house in Florida. J&J is in New Jersey right. That’s a long commute. Oh yeah, he’s has a private plane.
The J&J Credo has become little more than the equivalent of a politician’s wedding ring. The company flashes it for PR value but removes it when they think no one is watching.
Even at a company like J&J, layoffs may well be a neccesity. But if the Credo is truly lived, terminated employees would receive very gracious severance packages to bridge them to their next job. Reality is that once layoffs became a regular event at J&J, the packages were dramatically reduced by more than 1/2 to the level of “industry standard”. Sadly, the new package is considerably LESS generous than those from Wyeth, Astra, etc.
The credo has indeed fallen to the greed that characterizes so many modern day executives, including those at today’s J&J. In 2009 the credo remains little more than a story about how the company acted admirably in response to the Tylenol issue some 30+ years ago.
Doesn’t surprise me. JNJ is unethical as a competitor, why not discard your loyal employees.
I am very sadden at the turn J&J has taken since Weldon’s leadership of the company. It is no longer the company it was. The credo is something that is talked about but sacrifed for short term profits. It no different that most companies – total focus on the street. General Johnson would be ashamed….
The headline promises to offer an answer, but the article merely states an obvious question.
J&J credo means nothing to employees. Total lip service. They layoff and rightsize every year impacting thousands and thousands of loyal employees. But that makes a great company…. right??
The CREDO is an interesting document. Created by RW Johnson many years ago, when times were… well… different As an ex JNJ employee (12 years, we were “outsourced” this year), I’ve been able to see first hand what the main driver appears to be. It is simple.. it’s the dollar. Look at what is happening. A good amount of business and job growth in JNJ has , is, or will be moving to the off shore sites that bring the largest labor savings, regardless of what other factors might be present. Take a look in Juarez, Mexico. Lot’s of companies choose to use the cheaper labor force, and the El Paso corridor, including JNJ. Although the corruption in this part of the world runs deep, companies like JNJ still reduce US jobs for the savings they can realize. The question becomes if this part of the world behaves this way, why are our big US companies contributing to that economy? The answer would again be the dollar. JNJ has for years now taken a great deal of pride in bringing “double digit growth” to the financial community. Even in this challenging economic environment, JNJ seems to be holding that expectation higher than any other element of the Credo. I’m looking forward to the time when companies like JNJ begin to sacrifice some amount of profit and growth for economic stabilization. 7000 more people out of work will help the bottom line at JNJ, but that 7000 more people that now are… well… you know… hunkering down their spending.
Can you imagine a JNJ executive coming forward and saying we are going to slow down our profit expectations, cause we want to hunker down and save some jobs? Reminds me of a lyric from a song by Supertramp. “Dreamer…. you silly little dreamer”
Interesting take on J&J – they are historically very conservative. To that end, I think this is a sign that the world has changed. Not unlike some comments you have heard from retail CEOs on their view that consumer spending habits/behavior will be permanent rather than fleeting.
J&J is a good example of how important leadership is. Bill Weldon was a surprise choice for the CEO role….and he has been a disaster. What was once a business machine – with 10’s and even 100’s of operating companies striving for excellence, has been turned into a playground for Bill and his pals.
If you review all the acquisitions done since he has arrived you’ll find only one success, the Pfizer OTC business. The rest, Alza, Scios, Conner, etc were multibillion dollar failures. Cordis has been destroyed by the competition largely due to a terrible pricing strategy when Cypher was launched. Pharma led for 5 years by one of Bill’s friend….who was a reject from BMS. Now Pharma is run by someone from consumer products.
The belief within the executive ranks seems to be that as long as they increase the dividend shareholders will be happy….and they will keep getting their bonusses. Thats not leadership.
JNJ it truely a legendary company especially with regards to employee welfare however, it is a traded company and with all the pressures which comes with that. As a former employee I have the luxury of making comparisons. J&J does have major strengths and the legendary credo is a part of the structure. True, it’s applied differently around the world, and needs to be, given different cultural norms and expectations. However, one must keep in mind, the bi-annual “credo survey” ensures local management are meeting the Corporation’s expectations regarding the welfare on it’s employees, as perceived by those employees. My current employer, another global Fortune 100, has nothing like this in-place for engaging it’s employees.
Jessica, I’m sure Bill Weldon will tell you that you’ve misconstrued J&J’s Credo. It does not place employees ‘above’ communities or shareholders, or of any order. It simply acknowledges responsibility to those stakeholders and ultimately to the doctors, nurses, hospitals and patients who use our products everyday. J&J is not immune to the economic environment, but declines in several large revenue assets over several years are the reason for this restructuring. The job loss and impact on families is obviously troubling and I feel for those affected. Ultimately, J&J will bounce back as a stronger company well positioned to capitalize on the global health care market.
I’ve worked for Vistakon for 20 years and got layed off not due to senority but by performance. They lumped us all together. Lower level techs and upper level techs. Didnt matter that the upper level techs were required to know more so as a upper level tech as at a 5 I lost my job to a lower level tech that had a 6. They also said 5 managment positions were going to be impacted. They were but instead of losing their jobs they were moved to other positions within the company. Just like Weldon said. “I guarantee we will fight for every one of you that works in this corporation.” thats if your managment we’ll find a place for you but the ones that actually made the product, your out the door.
Weldon buys property Lost Tree Village – http://m.industry.bnet.com/pharma/10005099/jj-ceo-weldon-bought-845m-waterfront-lot-as-he-planned-8100-layoffs/
J&J credo is used as an example for all for all the good reasons…but J&J is a company like any other company and they need to keep pace with industry’s profitability. Trust me I know, after 10 years at J&J within 3 different companies, I was given a package (a ggod one mind you…) just before christmas 2008. I have won every sales award there is in the company (individual, team, region, project….) and still they didn’t do anything special for me…they simply had to cut 33 canadian employee’s as per corporate guideline and that was it…no more Regional sales managers. J&J is so decentralized that the credo is applied in many different ways…it’s all about individual leaders at that point and whatever they decide is the rule.
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Well said Hope.Yes bullying does go on in Vistakon Limerick.To quote from their credo”WE MUST BE MINDFUL OF WAYS TO HELP OUR EMPLOYEES FULFILL THEIR FAMILY RESPONSIBILITES what a load of bull.If you have any problems or misfortunes you are told get on with or get out the door.There is no compassion shown to employees by the upper management of Vistakon.Great place to work? I THINK NOT.