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Healthcare hiring in the crosshairs in China trade war

1 month ago by Jon Marino in Facts, News

Most of the 10 biggest US companies in the healthcare, pharmaceutical or consumer health business with production and operations in China have scaled back job postings nearly 30% from their 2018 peak until late June, yet another signal that the ongoing trade war between Presidents Donald Trump and Xi Jinping is impacting America's biggest drivers of GDP.

Johnson & Johnson ($NYSE: JNJ) has cut hundreds of job postings in China since hitting a peak in early 2018 - a similar pattern to the other healthcare industry companies with business there. US-based technology companies reduced job postings about 25%, which means that American companies in the healthcare space have made an even more aggressive retreat from a region that once had virtually unparalleled growth opportunities. 

The 10 companies with job postings in China had, in aggregate, 1,831 jobs open there at their 2018 peak - which, for most, came before trade war rhetoric began. That figure fell nearly 30% to 1,283 open jobs at last count - which, for most companies, was late June. The companies include: Pfizer, Baxter International, Becton Dickinson, Avery Dennison, Abbvie, Merck, Johnson & Johnson, Procter & Gamble, Amgen and Bristol-Myers Squibb. 

There were yet scant examples of companies with smaller operations in China, that increased hiring plans - although eight of 10 of the companies Thinknum tracked, generated declines in China for job postings. Each of the five top companies that had the largest operations in China reduced open roles there, as well. Johnson & Johnson and Pfizer ($NYSE:PFE) account for more than half of all job postings, and both companies cut back several hundred postings since hitting a peak in 2018.

It's similar to the story that is playing out in the technology sector - which has a difficult and increasingly complicated relationship with the Chinese. While hardware manufacturers, in particular, want to take advantage of mainland China's sales potential as well as its cheaper production capabilities, US tech firms with operations there have had to question their trust of local partners and regulators. In 2018 Bloomberg reported that US intelligence officials and tech executives determined Chinese spies implanted tiny chips in hardware bound for the US, and earlier this year it was reported by the New York Times that China's government officials summoned executives from companies including Dell and Microsoft to warn them to not cut back on production there. 

All of the trade strurm und drang may ultimately be for naught - as we close in on the one-year anniversary of the inception of the trade war, July 6, both Chinese and US officials have expressed optimism that the G20 meeting between Presidents Trump and Xi will result in a deal. If there is no deal, and the trade war continues, public markets, corporate production and consumer prices will likely see additional turbulence. 

About the Data: 

Thinknum tracks companies using information they post online - jobs, social and web traffic, product sales and app ratings - and creates data sets that measure factors like hiring, revenue and foot traffic. Data sets may not be fully comprehensive (they only account for what is available on the web), but they can be used to gauge performance factors like staffing and sales. 

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Jon Marino

Jon Marino is Thinknum's finance editor, covering the impacts of alternative data on public companies and investors. Prior to joining Thinknum, Jon worked in the ...

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