Nov. 4--For the third time in 13 months, employees at Vacaville's ALZA Corp. on Tuesday faced another round of layoffs, this time the result of the firm's parent company, Johnson & Johnson, reducing its global workforce 6 to 7 percent.

Plant manager Francesco Pannone was not available for comment, and Michael Bunter, director of human relations, referred all questions to a spokesman for the New Brunswick, N.J.-based health care conglomerate.

Greg Panico, the spokesman, did not know how many of ALZA's 550 employees would receive pink slips or how operations at the pharmaceutical and medical delivery systems company would be affected by the decision.

"I don't have a breakdown of operations at the regional level," he said, referring to the company's 117,000-square-foot Eubanks Drive plant, where workers manufacture such products as Sudafed, the popular cold medication, and Nicoderm, the well-known nicotine patch. "There will be some reductions of the employee force. You do the math. We're not providing specifics for the pharmaceutical sector -- or any other sector."

Panico said Johnson & Johnson made its decision -- coming on the heels of last month's announcement that ALZA is being offered for sale -- because of "reduced demand for product and other business issues." He again declined to be specific.

Another corporate spokesperson, Michelle Romano, said the corporate restructuring, one of Johnson & Johnson's biggest and affecting roughly 118,700 workers, was made to shore up the bottom line so that regional businesses -- more than 250 of them -- can meet the daily needs of customers. Some 8,000 jobs will be eliminated as the company streamlines its operations in an effort to cut costs as it braces for changes in the health care industry, she said.

The corporate announcement comes eight months after ALZA laid off 140 employees and a little more than a year after another round of cutbacks that pink-slipped 40 other employees. At one time, the company employed 1,200.

In a previous interview, Amy Firsching, a manager of communications for Johnson & Johnson, was unsure if ALZA, founded in 1968 and relocated to Vacaville in 1984, would be spun off, returning it to an independent corporate entity, or be folded back into the Johnson & Johnson web of global subsidiaries.

Of Tuesday's decision, Romano said restructuring will prompt a charge of up to $1.3 billion pretax in the fourth quarter.

Johnson & Johnson plans to simplify its business structure and projects that it will save between $800 million and $900 million next year and $1.4 billion and $1.7 billion annually after the restructuring is complete in 2011.

The company, the world's most diversified health-products maker, saw its revenue fall 5 percent in the third quarter as intensifying generic competition slashed sales of about a half-dozen of its prescription drugs, including the schizophrenia drug Risperdal and the epilepsy treatment Topamax.

Chairman and CEO William C. Weldon said the moves are meant to position the company for long-term growth amid an evolving, and sometimes turbulent, market.

"These types of changes are difficult under any circumstances, and will have a very personal impact on people who have been dedicated to the mission of Johnson & Johnson," he said. "We recognize their contributions to the achievements of our business, and are committed to treating them fairly and with respect throughout this process."

The new restructuring program follows management's decision to reorganize its comprehensive care business in August. That unit was created under a 2008 restructuring program with the goal of boosting sales, though sales were down during the first half of 2009. The unit makes medical devices and tests.

In July 2007, the company set a restructuring program that reduced its work force by 4 percent, or about 4,800 jobs.

"When you look at the total economic environment, I don't think anybody knows what's going to happen," Weldon said Tuesday. "But nobody expects it to come back tomorrow."

He said the move is based on a broad, global view of the changing health care industry, taking into account national and international markets. As for health care reform, management has said it needs more clarity on what any plan could look like before assessing a more concrete impact on the business. The restructuring program is also not a move to centralize J&J's operations, he added.

"We're trying to make sure we've really set ourselves up for the future," Weldon said. "We have such a rich portfolio that we have to make sure we have the resources to invest."

Johnson & Johnson confirmed its profit guidance excluding charges of between $4.54 and $4.59 per share for 2009. Analysts surveyed by Thomson Reuters forecast, on average, an annual profit of $4.58 per share.

Deutsche Bank analyst Tao Levy maintained his profit estimates, noting that "management gave lukewarm comfort with next year's numbers as the CFO said the restructuring appears to be reflected in operating leverage already in analyst models (i.e. don't raise numbers), which to us still seems somewhat conservative given the cost savings expected from the restructuring."

Shares of Johnson & Johnson fell 56 cents to close at $58.93 Tuesday.

The latest corporate announcement comes at a time of increasing difficulties for drug and biotech companies. They face more government regulation, loss of patent protection, layoffs and a "churn" among the industries' leading players. Also, drug and biotech giants have had to make do with reduced capital for research and development, increased costs to make new drugs and technology and the outsourcing of jobs overseas, where manufacturing costs are far less than those in the United States.

The Associated Press contributed to this report.

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