More than two years after running into some serious production troubles at its Las Piedras plant, McNeil Consumer Healthcare announced Tuesday it will layoff 225 people as it focuses on complying with correcting deficiencies detected by the U.S. Food and Drug Administration.
The layoffs represent about 20 percent of its current payroll of about 1,100 employees.
In a statement, the company said it will perform a series of upgrades and investments in technology to automate its manufacturing processes, that “will unfortunately result in reduced staffing levels.”
The decision announced Tuesday directly relates to concessions made with the FDA requiring McNeil to adhere to a strict timetable to bring its facilities in Las Piedras up to the regulatory agency’s standards. In March 2011, the FDA charged McNeil, a subsidiary of Johnson & Johnson, with manufacturing and distributing over-the-counter drugs in violation of federal law, as this media outlet reported.
Production troubles outlined in the FDA’s consent decree were not limited to the Las Piedras plant. The FDA also inspected McNeil’s Fort Washington and Lancaster facilities from 2009 to 2010 and found violations of the Federal Food, Drug, and Cosmetic Act at all three facilities. Manufacturing deficiencies at McNeil’s plans resulted in several extensive product recalls and millions in losses for J&J.
The Las Piedras facility, which is said to be responsible for producing about 60 percent of McNeil’s U.S. total revenue, received two warning letters from the FDA over quality issues related to batches of Motrin, Tylenol and Benadryl made there since January 2010.
Despite its negative implications, the announced staff reductions are a more positive alternative than closing the plant altogether, which pharmaceutical industry analysts last year said could be a possibility.
Limited production planned
On Tuesday, McNeill official said the Las Piedras facility will continue to produce in limited volumes as the remediation work continues, and will focus on manufacturing a more consistent and reliable supply of select Tylenol products.
“It is our intention to gradually increase the volume and number of products produced at the plant over time as our ongoing remediation and progress under the consent decree permits,” the company said in a statement. “If new hiring is needed as plant production increases in the future, McNeil will consider previous employees who are qualified for the new positions.”
However, staffing levels at the plant are expected to remain lower as a result of the automation being introduced, the company said.
“While decisions involving people always are difficult, we remain confident that these transformative steps will strengthen the capabilities of our Las Piedras plant,” the company stated.