A Diagnostics & Imaging Week

Abbott Laboratories (Abbott Park, Illinois) said last week that it plans to cut 1,000 jobs as part of a multi-year effort to lower spending on its medical testing business. Abbott said the plan will save the company $150 million before taxes, primarily by transferring manufacturing operations to Europe.

The company disclosed the cost-cutting plans in a regulatory filing.

Abbott's diagnostic division accounted for $3.2 billion, or 12%, of total revenue last year. The company sells a variety of blood and urine tests used to diagnose various diseases and medical conditions.

The company said the actions will cost $370 million before taxes, with about $150 million of that amount falling in the second half of 2008. Only about 100 jobs will be cut this year, according to the company, with all 1,000 jobs eliminated within four years. The jobs to be cut represent less than 2% of Abbott's 68,000-person global work force.

As part of the restructuring plan, Abbott said it will close its Pasadena, California, manufacturing site and eliminate positions at sites in Santa Clara, California, and Lake Forest, Illinois.

Most of the operations will be transferred to factories in Ireland and Germany, with the company saying that its diagnostic business has been growing faster in Europe than in the U.S.