At least 600 Bay Area employees will lose their jobs and 200 others will be transferred to other locations because of a major cost-cutting move announced Tuesday by medical-products giant Johnson & Johnson of New Jersey.
Two Mountain View divisions that will be especially hard hit are Alza, which develops special pills and other devices to deliver drugs into patients, and Scios, which makes drugs to treat cardiovascular ailments, inflammatory disease and cancer.
Both companies have been fixtures in the Bay Area for years and until recently had relatively large workforces. Alza, which was founded in 1968 and acquired by Johnson & Johnson in 2001, had about 900 employees at one point last year. Scios, founded in 1981 and taken over by Johnson & Johnson in 2003, had about 700 employees a year or so ago. But that has changed.
Last year, Johnson & Johnson laid off about 500 researchers and other employees at Alza and Scios, and moved Scios’ office from Fremont to Mountain View, where Alza was based. Other staff reductions followed in subsequent months.
Under the cuts announced Tuesday, Johnson & Johnson will dismiss about 600 additional Alza employees over the next few months – essentially gutting Alza’s Bay Area presence, said spokesman Ernie Knewitz.
“Research and development at Alza has been largely discontinued,” he said.
After the cuts at Alza, both it and Scios will have a combined workforce of about 200 people. Most of Alza’s remaining employees are expected to be moved out of the Bay Area, with some of them possibly headed to La Jolla, Knewitz said. He added that Alza will continue to maintain its manufacturing operation in Vacaville, where it has about 1,200 employees.
Scios’ employees will move out of their current Mountain View address, but stay in the Bay Area at a location yet to be determined, Knewitz said. Scios also will continue work on its drug Natrecor, a controversial treatment for acute heart failure that the company began selling in 2001.
Natrecor has been linked in some studies to an increased rate of kidney problems and death, but Scios executives maintain it poses no undue health risk and the Food and Drug Administration endorses it as a useful treatment.
Two other Bay Area divisions of Johnson & Johnson also could face cuts, company spokesmen said. They are Conor Medsystems of Menlo Park, which makes stents that help keep blood vessels open while delivering drugs to the body, and Nitinol Devices and Components in Fremont, which makes wires, tubes and other materials used in medical devices.
The officials were reluctant Tuesday to specify all of the divisions that will experience layoffs because they said the company wants to make sure affected workers hear about their terminations first from their supervisors. But they added that Conor and Nitinol could be scaled back because they are in a business unit targeted for cost reductions.
Spokesman Christopher Allman said he believes Conor has 200 to 300 Bay Area employees. The size of Nitinol’s workforce could not be determined Tuesday.
Johnson & Johnson also operates LifeScan in Milpitas, which makes blood glucose monitoring equipment and other products for diabetics. But it will not experience any job cuts, said spokesman Jeff Leebaw.
Johnson & Johnson said it will cut up to 4 percent – or 4,820 – of its 120,500 worldwide employees in an effort to save as much as $1.6 billion a year. The company is making the cuts largely because it fears some of its products will face competition soon from generic-drug makers, which typically offer medicines at relatively low prices. The company also has seen a decline in its stent sales.
