J&J, Merck Cut Jobs in China as Local Competition Takes Toll

Johnson & Johnson and Merck & Co. are cutting jobs in China, as they face growing competition from domestic rivals resulting from Beijing’s campaign to drive down medical costs.

Both US drug giants have laid off employees in China in recent days, according to people familiar with the matter who asked not to be identified discussing internal matters. The J&J cuts mainly impacted a division that sells products used in surgery, while Merck scaled back in its diabetes unit, the people said.

Chinese media outlets, which were first to report the redundancies, cited the J&J layoffs to be as much ...