Johnson & Johnson Details $1 Billion Cost Saving Initiative For Its Medical Devices Segment, Will 'Deliver More Value To Customers'

Shares of Johnson & Johnson (NYSE: JNJ) were trading higher by 0.26 percent at $97.25 early Tuesday afternoon after the company detailed a $1 billion cost saving initiative for its Medical Devices business.

Johnson & Johnson stated that it will eliminate approximately 4 to 6 percent of its entire staff within the Medical Segment over the next 2 years. The company noted that it will assume a pre-tax restructuring charge of $2.0 to $2.4 billion, $600 million of which will occur in the fourth quarter of 2015.

Following the head count reduction, Johnson & Johnson expects to realize an annualized pre-tax cost savings of $800 million to $1 billion. The company stated that the savings will provide management with flexibility and resources to finance new growth opportunities and innovate solutions for customers and patients.

"As a market leader, we are committed to leveraging our breadth and scale to shape the future of the medical device industry, for the benefit of those we serve," said Gary Pruden, Worldwide Chairman, Johnson & Johnson Medical Devices.

"The bold steps we are taking today are to evolve our offerings, structure and footprint and increase our investment in innovation. These actions recognize the changing needs of the global medical device market and will deliver more value to customers, increasing our competitive advantage and driving growth and profitability for our business."

Johnson & Johnson also reiterated its full year 2015 guidance and expects to earn between $6.15 to $6.20 per share on revenue of $70.0 to $71.0 billion.