by
Joan Trombetti, Writer | March 25, 2009
Streamlining the organizational structure
Evolving Hospira's organizational structure is another key step in optimizing its performance and in continuing to ensure Hospira delivers on its global growth promise. Hospira has identified, and is pursuing, significant opportunities to improve efficiencies and performance in several functional areas, including global procurement, finance and information technology. Efforts will include de-layering the company's management structure, consolidating certain functions and heightening the focus on process improvement to reduce complexity and redundancy, accelerate decision making and raise overall productivity.
Workforce impact
The net projected reduction associated with these collective actions represents approximately 10 percent of the company's global workforce, with the majority of reductions occurring in the next 12 months. Hospira will help prepare employees for the transitions through the provision of assistance packages.
Financial information
In connection with these actions, Hospira estimates it will incur total pre-tax charges in the range of $140 million to $160 million, of which approximately $90 million to $100 million will be incurred during 2009. The total charges for the project include cash costs of approximately $120 million, primarily related to restructuring costs, including employee-separation and other costs, as well as process optimization implementation costs. Approximately $30 million of non-cash costs is related to various potential asset write-downs. Hospira expects these actions will deliver annualized pre-tax savings of approximately $8 million to $10 million in 2009 and approximately $110 million to $140 million on an annualized run-rate basis, which it expects to reach by the second quarter of 2011.
About Hospira
Hospira, Inc. is a global specialty pharmaceutical and medication delivery company dedicated to Advancing Wellness(TM). As the world leader in specialty generic injectable pharmaceuticals, Hospira offers one of the broadest portfolios of generic acute-care and oncology injectables, as well as integrated infusion therapy and medication management solutions. Through its products, Hospira helps improve the safety, cost and productivity of patient care. The company is headquartered in Lake Forest, Ill., and has more than 14,000 employees. Learn more at www.hospira.com.
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