Kenvue (Stock Code: KVUE.US) announced on this Monday that Johnson & Johnson (Stock Code: JNJ.US) plans to proceed through its holdings in Kenvue.9.5% sharesThe exchange to repay the debt of Johnson & Johnson held by Goldman Sachs and JPMorgan Chase (collectively referred to as the "selling shareholders"). Based on Kenvue's most recent closing price, the value of this stock sale is approximately$3.75 billion。After the stock-debt swap, Johnson & Johnson willNo longer hold any common stock of Kenvue。
Cutting the "Kite String," This Time Fully Independent
Kenvue is a company spun off from Johnson & Johnson that focuses on consumer health business, providing a variety of personal health products, with its business coveringSelf-Care, Skin Health and BeautyThree main areas. The company owns several well-known household brands, including TTylenol, Neutrogena, Band-Aid, Aveeno, Listerine, etc.。In November 2021, Johnson & Johnson announced plans to spin off its consumer health business, marking the largest spin-off and restructuring plan in the company's history.In September 2022, the new company name "Kenvue" was officially announced, symbolizing the company's deep understanding and extensive knowledge of consumer needs.In May 2023, Johnson & Johnson announced the independent listing of Kenvue on the New York Stock Exchange, with an IPO price of $22 per share, issuing 172.8 million shares of common stock, raising a total of $3.8 billion, becoming the largest IPO in the U.S. stock market since November 2021.On August 23, 2023, Johnson & Johnson announced the completion of the spin-off of Kenvue, which became a fully independent company."Cutting flesh" and layoffs, everything was foretold
Before Johnson & Johnson fully divested its shares in Kenvue, there were clear signs of the upcoming changes. Recently, Kenvue announced its global layoff plan,Expected Layoffs4%, which is the third round of layoffs following the layoff of 51 people in New Jersey and 84 people in California this past February.
Currently, Kenvue has approximately 23,000 employees, so this round of layoffs may affect nearly 920 employees. One of the reasons for the layoffs is the upcoming termination of Kenvue's "Transition Service Agreement" (TSA) with Johnson & Johnson. As part of the company’s cost reduction and efficiency improvement plan, Kenvue aims to achieve $350 million in annual pre-tax cost savings by 2026, which will be reinvested.and other purposes. However, the layoff plan also comes with high costs. According to Kenvue, the expenses related to this layoff are as high as$275 million。 
This series of layoffs reflects Johnson & Johnson's accelerating pace of business restructuring and the increasingly clear boundaries between its various subsidiaries. In September last year, Johnson & Johnson replaced its iconic cursive logo, which had been used for 135 years, with a more modern typeface and a bolder red tone. The logo update was not only a refresh of the company’s image but also an embodiment of its new development direction and strategic adjustments. Notably, Johnson & Johnson applied the new logo to its medical device and pharmaceutical businesses, while the consumer health division retained the original logo. This distinction further confirms Johnson & Johnson’s long-term strategy to focus on advancing innovative medicine and medical technology.Mass Layoffs, the "Broad Entry Plan" in the Medical Industry
According to foreign media reports, in addition to Johnson & Johnson, Medtronic will also carry out the second round of layoffs. Based on the information disclosed so far, this round of layoffs occurred after the end of Medtronic's FY24 fiscal year and just before the release of FY24 financial report. In the second round of layoffs in 2024, Medtronic did not issue any official statement, and the confidentiality was stricter than the global large-scale layoff conducted in April 2023. This may be because the scale of this layoff has decreased compared to last year.
However, whether this year or last year, we have always been unable to accurately obtain the specific number of Medtronic's layoffs. But despite the lack of related news coverage from Medtronic and mainstream media, theoretically allowing for silent layoffs, it is rumored that Medtronic employees exposed this layoff process to the public through a relay-like method on social media.The First Wave of Layoffs
Before moving on to the latest topic, let's briefly review the first wave of layoffs that occurred earlier this year.As previously reported by mainstream media, the PM&RI business was reorganized and renamed ACM. Due to this reorganization, the ventilator business was discontinued, resulting in dozens of layoffs at the California ventilator production site.
(The above information is compiled from MedTalks.)The Second Wave of Layoffs
Recently, rumors about another round of layoffs that had been circulating for months came true, and some posts along with comments below appeared. These anonymous posts revealed...Can be seen, A wave of layoffs is sweeping across the entire American continent and even farther.The following are some quotes from those anonymous posts. It seems that CRM has been hit hard, which is where the pacemaker portfolio belongs. Given this vague figure, we speculate that the scale of this round of layoffs is much larger than the closure of the ventilator business and covers a much wider range.- Two people were laid off in the R&D department of Brooklyn Park.- I was fired this morning from the Chanhassen, Minnesota office.- CRM. We have just found out that we lost 5 people, including two supervisors, two managers, and one compliance officer.- I was also affected by the layoffs today. I have a colleague who, like me, is a CRM.- I heard that more than 100 people were laid off from the CRM today. Now, those of us who remain have an even greater workload!- 2 people —— Cardiac Surgery, R&D- The Endo (Endoscope) department has laid off some sales personnel.- In Caesarea, Israel, employees in V&V (Verification and Validation), systems, and some QA (Quality Assurance) departments were laid off.- Today, the spine department also had layoffs.- Layoffs also occurred yesterday at PVH (Patient Care Home) in Santa Rosa.- The Manufacturing Technology Department received an "Business Update" email (ps: In the case of MDT, "Business Update" means layoffs).- OU (Ophthalmology); Cardiac Surgery; Meeting Title: Restructuring. Several R&D positions have been terminated.MDT employees complained: "The company always says that talent is the most valuable asset, but when leadership fails, the company does the opposite." It’s no surprise to see some anonymous posts, such as starting to quietly resign.(The above information is compiled from MedTalks.)
In this wave of layoffs in the healthcare industry, the actions taken by Kenvue and Medtronic are merely a microcosm of the overall industry adjustments. Facing fierce market competition and ever-changing healthcare demands, companies must implement necessary strategic adjustments to optimize resource allocation, enhance operational efficiency, and ensure long-term sustainable development.
Ultimately, whether it is Kenvue, Medtronic, or other medical companies undergoing transformation, they all need to continuously adapt to market changes while ensuring patient benefits and improving the quality of medical services, in order to achieve a win-win situation for both the enterprise and society. This requires not only the wisdom and courage of the companies but also the understanding and support of policymakers, industry participants, and the broader society.▲ Source: Medical Device Innovation Network▲Please indicate the source above when reprintingDisclaimer: This article is for informational purposes only and serves as a reference. It does not constitute any advice on investment or treatment. Please exercise caution and discretion. If the content, copyright, or other issues are involved, to protect the rights and interests of both parties, please contact us, and we will handle it immediately. If this article is reprinted by any platform, the platform shall be responsible for the content of the article. The Medical Device Innovation Network is not responsible for any secondary dissemination caused by reprinting.
