Nov. 3 (Bloomberg) -- Johnson & Johnson, the world’s biggest health-products company, will fire more than 7,000 workers as it tries to eliminate layers of management and invest in more profitable areas of its business.

The cuts will shrink J&J’s workforce by 6 percent to 7 percent and save as much as $1.7 billion by 2011, the New Brunswick, New Jersey-based business said today in a statement.

J&J has been trying to diversify its business into biotechnology medicines, consumer products and medical devices as it faces generic competition to its antipsychotic Risperdal and migraine drug Topamax. The company reported third-quarter revenue that was lower than analysts had expected, citing generic competition and slowing demand for consumer products.

“Today, we are announcing a series of actions and plans designed to ensure that our company remains well-positioned and appropriately structured for sustainable, long-term growth in the health care industry,” Johnson & Johnson Chief Executive Officer William C. Weldon said in the statement.

J&J fell 7 cents, or less than a percent, to $59.42 at 9:42 a.m. in New York Stock Exchange composite trading. It has lost 2.7 percent of its value in the past 12 months before today.

Drugmakers have been slashing researchers and salesmen to lower costs over the past two years because of losses from generic competition.

Two Years of Cuts

Pfizer Inc., the world’s biggest drugmaker, plans to fire 19,000 workers following its acquisitions of Wyeth and had already cut 10,000 positions since 2007. J&J began firing as many as 4,400 employees from its pharmaceutical and stent divisions in 2007. The most recent round of cuts will be company-wide, J&J said.

J&J agreed to buy Cougar Biotechnology Inc. in May and a stake in Elan Corp. in July for about $1 billion each to add potential new drugs. In September, the company paid $442 million for an 18 percent stake in Crucell NV, based in Leiden, Netherlands, to gain flu shots.

To contact the reporter responsible for this story: Shannon Pettypiece at spettypiece@bloomberg.net.

Last Updated: November 3, 2009 09:49 EST