Pfizer keeps growing -- and keeps cutting jobs
Now that the acquisition of Wyeth is complete, the giant drugmaker announced a massive research and development reorganization. This didn't really come as a surprise when two large companies combine operations. Despite the expectation, however, such announcements -- especially when unemployment is running at 10.2% -- can still cause jitters.
Pfizer is calling its reorg a "global research and development network [which] brings together scientific strengths from both companies, continues efforts to increase research productivity, focuses disease-area research in single locations and more efficiently uses the company's real estate."
Translation: Pfizer is closing six of its 20 research facilities and is planning to reduce activities, restructure and consolidate other plants as it slashes 15% of its R&D staff and 35% of its R&D square footage. Research will now be conducted at five main sites and nine specialized units around the world. A 15% cut in R&D staff means some 2,000 scientists and laboratory technicians will lose their jobs.
Hard-hit areas will be Collegeville, Pa.; Pearl River, N.Y.; and St. Louis, whose operations will be moved. Operations will be discontinued in Princeton, N.J.; Chazy, Rouses Point and Plattsburgh, N.Y.; Sanford and Research Triangle Park, N.C.; and Gosport, Slough/Taplow, U.K. Consolidation will occur at the New London/Groton, Conn., sites. Pfizer says it "is committed to supporting affected colleagues, their families, and the affected communities through this transition."
From June 2005 through September 27, 2009, Pfizer has cut 26,300 of the 30,900 jobs it planned to eliminate through 2012, according to a recent SEC filing. Pfizer also said it plans to slash 19,500 jobs as a result of the merger with Wyeth. At Pfizer's massive rate -- 1,100 jobs in the third quarter and 6,500 in the first nine months of the year -- we can only hope these 2,000 lost R&D jobs are part of the 19,500 and not in addition.
"The Best Position...to Deliver"
Pfizer says it "will have five main research sites that will serve as central hubs for research activities in BioTherapeutics, PharmaTherapeutics and Vaccines. These sites are: Cambridge, Mass.; Groton, Conn.; Pearl River, N.Y.; La Jolla, Calif.; and Sandwich, U.K. These research-oriented laboratories will be supplemented by specialized research capabilities, such as monoclonal antibody discovery in San Francisco, regenerative medicine work in Cambridge, U.K., and research and development activities in Shanghai, China."
Mikael Dolsten, president of BioTherapeutics Research & Development, says "This new structure puts Pfizer in the best position to conduct cutting-edge research within and beyond our own laboratories and to deliver a portfolio of high-impact medicines to patients."
And Pfizer needs all the improved R&D it can get. The drugmaker is big, and it just got bigger. But the bigger they are, the harder it is for them to grow. Pfizer is doing everything it can to produce growth, yet it can't manage to escape the inevitability of blockbuster drugs coming off patent in the coming years.
Only last week, Dow Jones reported Pfizer disclosed in a regulatory filing that