Cardinal Health to Cut 1,300 Jobs

Cardinal Health is planning to cut jobs from its clinical and medical products divisions. Late last year, the company announced plans to spin off the divisions as a separate entity.

About 800 current employees will be laid off, and 500 positions will be eliminated through attrition and not filling open spots over the next six months. About 40,000 people work for the company worldwide. Additionally, Dublin, Ohio-based Cardinal Health, will implement cost-control measures and make more reductions in spending across all of its businesses.

The company expects an annual savings of approximately $110 million to $130 million within two years from the restructuring.

“While many companies have taken similar actions to respond to the current economic realities, these are very difficult decisions because of their effect on our employees and their families,” said R. Kerry Clark, Cardinal Health chairman and CEO. “However, these measures are necessary to help offset current economic conditions and will ultimately strengthen our businesses for the longer term.”

Cardinal Health expects to complete the spinoff—recently dubbed CareFusion Corp.—this summer, but company officials noted outside factors could push the timing of the transaction to later in the year. On March 31, the company filed the necessary forms with the U.S. Securities and Exchange Commission to list CareFusion on the New York Stock Exchange. The “Form 10” filing outlined Cardinal Health’s plan to spin off at least 80 percent of the outstanding common stock of CareFusion through a pro rata distribution to Cardinal Health’s shareholders, with Cardinal Health retaining the remaining shares.

For fiscal 2008, ended June 30 last year, the two divisions that will make up CareFusion reported revenue of $4.5 billion and operating earnings of $725 million. CareFusion will be based in San Diego, Calif.