Big Pharma Is Still Cutting Jobs, at Least in the West
This follows an announcement last week from AstraZeneca (AZN) it would eliminate another 10,400 jobs by 2014 (8,000 of which are new cuts), or about 16% of its workforce, as part of a $2 billion, five-year restructuring. AstraZeneca already sliced 12,600 jobs between 2007 and 2009.
A Continuing Pattern
The layoffs at both companies include thousands of research and development positions, which may be surprising in light of their need for new drugs. Still, most analysts think GSK's pipeline is healthier than that of Astra and other rivals, with more than 30 products in the advanced stages of testing. GSK has already had several key patents expire in the past two years, with more coming in the next few. Astra will face generic competition for two of its blockbuster drugs this year, and is also set for more in coming years.
The situation at these two companies isn't much different than what the pharmaceutical world has been going through already. Following are some highlights of the huge layoffs in 2009:
- Pfizer (PFE) appears to have topped the job-slashing list with 19,500 cuts.
- Merck (MRK) followed closely with 16,000 positions lost.
- Johnson & Johnson (JNJ) announced 7,000 to 8,000 layoffs in November, adding to earlier 900 sales jobs cut.
- AstraZeneca is now adding to the 7,400 positions it eliminated in 2009.
- GSK, too, is adding to earlier cuts of 6,000, including 2,000 sales jobs in the U.S.
- Eli Lilly (LLY) added 5,500 people to the ranks of the unemployed.
- Medtronic (MDT) said last May that it's reducing headcount by 1,500 to 1,800.
When Lilly announced its cuts, the WSJ Health Blog noticed the overall headcount increased, meaning it added jobs in emerging markets. Pfizer says it's looking to increase its sales force in China to 3,200 by the end of next year, up from about 2,300 now. Novartis (NVS), too, will boost the number of employees at its R&D center in Shanghai, from 160 now to 1,000 over five years.
So, the downsizing of Big Pharma workforces in Western economies may be offset somewhat by expansion in emerging markets. That may be consolation for investors, but not to those losing their jobs.