Health care products giant Johnson & Johnson plans to transfer part of its DePuy Synthes operation in Monument to manufacturing outsourcer Jabil next year, a company spokeswoman confirmed Monday.
The move is part of a restructuring announced earlier by New Jersey-based Johnson & Johnson to boost efficiency in its global supply chain so it can boost “investments in critical capabilities, technologies and solutions,” a company news release says. The restructuring also is designed to cut costs, the release said.
Johnson & Johnson acquired Switzerland-based Synthes in 2012 in a deal that included the Monument manufacturing plant and distribution center along with three other U.S. plants and one in Germany. The Monument plant last year had more than 1,000 employees and contractors to make orthopedic and neurological products for joint reconstruction, trauma, spine, sports medicine and other uses, reports The Tribune, which covers the Tri-lakes area of northern El Paso County.
After announcing the restructuring, Johnson & Johnson’s medical device unit accepted Jabil’s offer to form a “strategic collaboration” that included transferring part of the Monument plant and its employees to Jabil starting in 2019, said Jessica Giangaspero, a Johnson & Johnson spokeswoman. While the restructuring is expected to eliminate about 2,600 jobs, those cuts are not related to the Jabil transaction, she said.
The deal matches Johnson & Johnson’s “leadership in medical device development with Jabil’s best-in-class manufacturing and supply chain solutions,” Giangaspero said by email.
The restructuring is designed to “enable a leaner, more agile supply chain with increased flexibility and the ability to allocate resources to invest in customer solutions and drive growth.”
The moves are expected to save Johnson & Johnson $600 million to $800 million a year beginning in 2022 but will cost it between $1.9 billion and $2.3 billion this year.
A Jabil spokeswoman referred all questions to Giangaspero, who declined to answer questions beyond her statement.
Florida-based Jabil also operates a design center in Colorado Springs it opened in 2009 for product engineering work for clients in computer storage, networking and telecommunications. The company operates more than 100 facilities in 29 countries.