Carter-Wallace to cut U.S. workers

October 05, 1994|By Bloomberg Business News

NEW YORK -- Carter-Wallace Inc. said that it will slash 23 percent of its U.S. work force, end most pharmaceutical research and close plants because of problems with its most profitable and promising drugs.

The moves would shift Carter-Wallace toward consumer products, which generated about 55 percent of fiscal 1994 sales with products such as Arrid deodorant, Trojan condoms and H-R lubricating jelly. Health care products such as the asthma drug Organidin and Soma muscle relaxants accounted for the rest of sales.

The steps come three months after Carter-Wallace said it would quit selling Organidin, which generated 85 percent of its pretax earnings, and two months after it advised doctors to quit treating patients with Felbatol, an epilepsy drug one analyst had predicted would generate about half its fiscal 1995 earnings.

"Investors were questioning whether Carter-Wallace management would be somewhat proactive and engage in something like a restructuring," said Jason Seltzer, an analyst with Vector Securities International in Deerfield, Ill. "It's certainly a positive signal."

The company's share price closed up 50 cents at $13.875 on the New York Stock Exchange. The shares have lost 57 percent of their value in the past year.

Carter-Wallace said it plans to eliminate 630 jobs, including 60 vacant positions.

The cuts would reduce its sales force by 41 percent and reduce the 4,060-person worldwide work force by 16 percent. Carter-Wallace has about 3,000 U.S. employees and 1,060 overseas.

The company said it will close plants and significantly reduce production at one plant, but it wouldn't name sites.

It operates six plants in the U.S., two in Puerto Rico, two in Italy, two in Canada and one each in Mexico, New Zealand and Spain.

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