Cardinal Health will reduce its global work force by approximately 800 over a six-month period and eliminate an additional 500 positions through normal attrition and not filling open roles, as a result spinning-off CareFusion. The spin-off filed a Form 10 registration statement with the Securities and Exchange Commission (SEC) this past Tuesday.
Cardinal said it 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.
As part of the work force reduction, the company expects to record a restructuring charge of approximately $33 million for the remainder of fiscal 2009 and an additional charge of approximately $24 million in fiscal 2010. The company estimates this action will deliver annual savings of approximately $110 million to $130 million within two years, according to R. Kerry Clark, Cardinal Health chairman and CEO.
The Form 10 filing outlines Cardinal's plan to spin off at least 80 percent of the outstanding common stock of CareFusion through a pro rata distribution to its shareholders, with Cardinal retaining the remaining shares.
Cardinal will divest its shares of CareFusion within five years after the spinoff, which is expected to be completed later this calendar year, the company said.
Additionally, the filing outlined executive officers for CareFusion, including David Schlotterbeck, Cardinal vice chairman, as CEO; Dwight Winstead, COO; Cathy Cooney, executive vice president of human resources; Vivek Jain, president of medical technologies and services; Thomas Leonard, president of dispensing technologies; Joan Stafslien, executive vice president, general counsel and secretary; and Carol Zilm, president of critical care technologies.
The company said it is making progress in its search for a chief financial officer for CareFusion.