In addition, Cardinal Health will implement cost control measures and additional reductions in discretionary spending across all of its businesses, primarily in response to a delay in hospital capital spending and the overall decline in the global economy.
“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 chief executive officer. “However, these measures are necessary to help offset current economic conditions and will ultimately strengthen our businesses for the longer-term.”
As part of the workforce reduction, Cardinal Health expects to record a restructuring charge of around $33 million for the remainder of fiscal 2009 and an additional charge of about $24 million in fiscal 2010. The company estimates this action will deliver annual savings of about $110 million to $130 million within two years.
