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Lowe’s, Abbott plan to cut thousands of jobs

Lowe’s, the country’s second-largest home-improvement chain, and drugmaker Abbott Laboratories announced thousands of jobs cuts Wednesday.
/ Source: msnbc.com news services

Lowe’s, the country’s second-largest home-improvement chain, and drugmaker Abbott Laboratories announced thousands of jobs cuts Wednesday.

Lowe’s said it will cut about 1,700 middle managers across the United States. The news comes as home improvement chains focus on cutting costs to tackle tepid demand for expensive renovations in a slowly recovering U.S. economy.

"We are streamlining our store management team — creating assistant manager positions (4-6 per store) and placing members of the existing management team in those positions," the company's spokeswoman Julie Yenichek told Reuters.

The retailer said it will also add thousands of hourly, part-time sales staff for weekends, and added that applications to fill the 8,000 to 10,000 new jobs will start next week.

Abbott plans to eliminate 1,900 employees to keep profits up, indicating that one of the pharmaceutical industry's few success stories of recent years is not immune to cost pressures squeezing the sector.

The maker of drugs and devices said the terminations involve U.S. marketing and manufacturing positions. The cuts, which represent about 2 percent of the company's work force, are expected to save the company $300 million in coming years. Abbott blamed the cuts on new fees and pricing pressures associated with the health reform law and a "challenging regulatory environment" at the Food and Drug Administration, which approves new drugs.

Abbott has steadily increased its revenue year after year, even as most of its pharmaceutical peers have watched sales fall as patents on blockbuster drugs expire. And while the company's multibillion dollar, anti-inflammatory drug Humira continued to deliver in the latest quarter, Abbott has stumbled in efforts to develop new therapies.

Last week the company halted research on a next-generation psoriasis drug after the FDA indicated additional clinical trials would be needed to win approval.

The company has also wrestled with high profile safety problems in the past year. It pulled its diet drug Meridia from the market in October because of heart risks, only one month after it recalled millions of containers of its best-selling Similac baby formula because of possible contamination from insect parts.