Major Restructuring at Quest Will Cost up to 600 Jobs

Quest Diagnostics Inc. has become the latest in a string of medtech companies to “reorganize” before the medical device excise tax takes effect on Jan. 1—although the firm is not officially blaming the levy for the changes. The Madison, N.J.-based company has launched a major management restructuring, and also has appointed senior leaders to head its new commercial, operations and human resources departments.

Quest executives claim the reorganization is needed to replace the existing corporate structure with two new business groups—diagnostic information services and diagnostic solutions. The changes will take effect by Jan. 1.

“The new organization will allow us to aggressively drive operational excellence and improve our customer focus, which will, over time, enable us to restore growth,” said Steve Rusckowski, president and CEO.
The reorganization will eliminate between 400 and 600 management positions by the end of 2013; the cuts will add $65 million to a previously announced cost reduction plan savings of $500 million.

The new diagnostic information services group, which will include most of the company’s revenues, will replace the current physician services, hospital services and cancer diagnostics businesses. It will develop and deliver diagnostic testing, information, and services, and be responsible for new test development, sales and marketing, routine and esoteric laboratories, and field operations.

Everett V. Cunningham will be the first new “senior leader” to join Quest on Oct. 15. He will serve as senior vice president of commercial operations. Cunningham was most recently regional president of established products in Asia for Pfizer Inc., where he served in a series of sales leadership and general management roles over the past 21 years.

John B. Haydon will join the company on Oct. 22 to become senior vice president of operations. Haydon currently is executive vice president and global head of operations and business excellence for Philips Electronics.

Jeffrey S. Shuman, set to begin on the same day, will take the role of senior vice president and chief human resources officer. Shuman most recently was senior vice president, chief human resources and administrative officer for Harris Corporation, an international communications and information technology company.

“Everett Cunningham and John Haydon are experienced, results-oriented individuals who bring the knowledge and experience needed to drive operational efficiency and help restore growth,” said Rusckowski. “Jeff Shuman is a recognized leader in human resources, with a proven record of delivering transformational change. I am excited to welcome all three to Quest Diagnostics.”

Rusckowski also thanked key executives who are leaving the company for their service: Richard Mahoney, vice president, healthcare information services; Joan Miller, senior vice president, oncology and neurology services; and David Norgard, vice president, human resources, plan to leave the company by year’s end. Joseph Benage, vice president, insurer and employer services, will leave in 2013.

Quest Diagnostics provides diagnostic testing, information, and services aimed to improve patient care.