Neutrogena is permanently closing its Los Angeles office as parent company Kenvue Inc. consolidates operations in New Jersey. According to a worker notification document viewed by Bloomberg News, the closure is resulting in 84 layoffs. Of those employees, 74 have been offered relocation and employment at other company locations.
Kenvue, which owns consumer brands such as Tylenol and Aveeno, is moving its headquarters to a renovated office building and newly built research and development facility in Summit, New Jersey. The company is currently based in Skillman, New Jersey. A spokesperson said closing the office is part of Kenvue’s effort to boost growth and improve collaboration.
“Decisions that impact our employees are never easy,” the spokesperson said. Neutrogena gained popularity in the ’80s and ’90s and was acquired by Johnson & Johnson in 1994. It benefited from the consumer health giant’s deep marketing pockets and product development prowess.
Neutrogena Faces Supply Challenges
More recently, the brand has faltered amid supply shortages, which have caused retailers to remove Neutrogena items from the shelves and replace them with rival products. Kenvue was spun off from J&J last year.
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Neutrogena’s struggles have weighed on Kenvue’s results. The parent company reported an 8% drop in organic sales for its skin health and beauty segment in the most recent quarter. Kenvue stock has declined 6.8% this year and 8.8% from its initial public offering in May 2023.
Headquarters Dismisses Staffs
In addition to laying off 84 staff, Kenvue will dismiss 51 employees at its current headquarters this spring. The company is also restructuring other parts of the business. The move comes after Johnson & Johnson acquired Neutrogena 30 years ago and spun off part of the company into an independent, publicly traded company called Kenvue Inc.
In a statement, Kenvue’s media department said the company is evolving its operations “to reach more consumers.” It also plans to “optimize collaboration, broaden talent and career opportunities for all Kenvuers, and drive sustainable growth.”
“As part of this, we will be consolidating operations from other sites to one location,” the company said. “Our future world headquarters is in Summit, New Jersey. However, decisions impacting our employees are never easy.” The company also noted its commitment to “providing those affected by this change with the resources and support they may need.”
Kenvue is an enormous company whose annual revenues last year totaled $15.44 billion, with a net income of $1.664 billion. Its brands cover a host of beauty and health care products that include Aveeno, Band-Aid, Benadryl, Zyrtec, Listerine,
Also, it’s the parent company of Mylanta, Neutrogena, and Tylenol. Neutrogena and other skin and beauty products make up about 20 percent of revenues, according to financial filings with the Securities & Exchange Commission.
Sales Dropped
In the most recent fourth quarter of 2023, Kenvue reported an 8 percent drop in organic sales for its skin health and beauty segment. In 2021, Johnson & Johnson, who owned Neutrogena then, was hit with several class action lawsuits in several states for reportedly violating state consumer fraud regulations.
Consumers accused them of not disclosing that some Neutrogena and Aveeno sunscreen products allegedly contained benzene, which has been established to cause cancer in humans.
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Also, those cases were consolidated, and a nationwide class settlement was reached in 2023, where Johnson & Johnson agreed to pay a $1.75 million settlement. However, that decision is being appealed in the U.S. 11th Circuit Court of Appeals in Fort Lauderdale, Fla.
How Long Has Neutrogena Been in Business?
Neutrogena has been a legend in Los Angeles’ history of small ideas that became big business. It was founded in 1930 by Emanuel Stolaroff, who manufactured cosmetics and other products. In 1954, Stolaroff met Belgian chemist Edmond Fromont and acquired the U.S. Rights to distribute a patented formula to make a mild clear soap that cleaned skin without drying it.
By then, Lloyd Cotsen had joined the company after marrying the boss’s daughter, Joanne Stolaroff. In 1962, the company name was changed to Neutrogena Corp. Additionally, Soon Cotsen, who had an MBA from Harvard, embarked on a major marketing campaign by giving samples of the clear soap made in an amber hue to dermatologists who passed it on to their patients.
He also shared it with hotels that stocked guests’ bathrooms with the clean-smelling product. The marketing technique was a concept before its time, and it paid off. In 1994, the soap company, which had expanded into skincare and hair care, was sold to Johnson & Johnson for $924 million.
Cotsen, who was the president and chief executive officer at the time, passed away in 2017.
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