Laboratory Corporation of America Holdings (LH -3.7%) plans to expand its LaunchPad business process improvement initiative to its Covance Drug Development unit. The two-phase plan will be implemented over three years.
The aim of the first phase is to better align Covance's resources with its near-term outlook, an action that will result in job cuts this year. The company says it will save ~$20M pretax in 2017 and ~$45M each year thereafter with a reduction in workforce and closure of certain facilities. It plans to record a total charge of $30M this year to cover severance costs and expenses associated with shuttering the sites.
The second phase will focus on long-term structural changes designed to create a more efficient business model. Additional details will be provided later this year.
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