Pfizer Plans 6,000 More Manufacturing Job Cuts Globally

For several years now, Big Pharma has been cutting massive numbers of jobs. Companies restructured in preparation for the looming patent cliff -- many drugs are scheduled to lose patent protection over the next few years, and that lost revenue will be hard to replace. And a series of mergers has only added to the mountain of layoffs. So Pfizer's (PFE) announcement Tuesday that it will lay off 6,000 more people as part of a manufacturing reorganization following the Wyeth acquisition shouldn't surprise anyone.

The maker of the world's best selling drug, cholesterol fighter Lipitor, is gearing up to facing generic competition when that drug's patent expires next year. With it, the bulk of the over $12 billion a year in Lipitor sales will be lost. The $68 billion mega-merger with Wyeth was intended to help the largest pharmaceutical in the world offset some of its looming troubles by adding revenue, achieving better operating costs and improving manufacturing.

Pfizer currently operates 78 plants internationally -- 40 of them originally Pfizer's -- with a workforce of some 33,000, out of the approximately 113,800 employees it had at the end of the first quarter 2010.

Pfizer previously said it was evaluating manufacturing sites in the wake of the Wyeth acquisition, and if anyone was under the impression the drugmaker needed or was going to maintain so many plants, they missed the point of the merger. Especially when Pfizer said it remains on track to achieve its cost-reduction target of $4 to $5 billion by the end of 2012.

Ireland, Puerto Rico Will Be Hard Hit

In order, then, to "increase manufacturing efficiency and lower costs," Pfizer plans to cease operations at eight manufacturing sites in Ireland, Puerto Rico, and the U.S. by the end of 2015, as well as to reduce operations at six other plants in Germany, Ireland, Puerto Rico, the U.K. and the U.S. This will result in 6,000 jobs lost globally over the next few year -- 18% of Pfizer's manufacturing workforce, and 5% of its total workforce.

"The restructuring of our global plant network is critical to our efforts to remain competitive," said Pfizer Global Manufacturing President Nat Ricciardi in a statement.

Pfizer has said that "In an effort to preserve jobs and minimize the impact to communities, Pfizer will explore opportunities to divest plants in the event operations are discontinued." That may not be enough to alleviate the impact on Ireland, which will lose three plants, or Puerto Rico, which will lose two.

Wyeth Merger Plan Called for Cutting 30,900 Jobs

In the U.S., the hardest hit areas will include Rouses Point, N.Y., where a plant will close; Richmond, Va., where consumer health care manufacturing will cease, but R&D operations will remain; and Pearl River, N.Y., which will see biotechnology and consumer health care manufacturing end, though its vaccine and biotherapeutics R&D operations will continue. Two biotech plants in Andover, Mass., and Sanford, N.C. will see reduced operations.

From June 2005 through Sept. 27, 2009, Pfizer cut 26,300 of the 30,900 jobs it said it planned to eliminate through 2012, according to a SEC filing. Pfizer also said it plans to slash 19,500 jobs as a result of the merger with Wyeth. It had already announced a massive reorganization in R&D last year.

But every so often we hear of more "smaller scale" layoffs such as job cuts in New York City,680 jobs lost at two Pennsylvania sites, 800 R&D jobs cut, and so on. It is never quite clear whether these are in addition to, or part of, the planned layoffs.