Research and development takes a hit as AstraZeneca announces plans to slash another 8,000 jobs worldwide

Pharma giant AstraZeneca is to cut another 8,000 jobs globally over the next four years - with approximately 1,800 additional research and development staff to be lost. 

The cuts - reported today as the company presented its 2009 financial results - come on top of 15,000 job cuts announced across the company since 2007, of which 12,600 have gone to date. 

The Anglo-Swedish firm has around 63,000 employees worldwide; as of April 2009, approximately 12,000 were employed in R&D, with the largest sites being Alderley Park in the UK with 4,500 employees engaged in research and M?lndal in Sweden with 2,700 staff. 

Major changes to R&D activities were also revealed as part of the streamlining process, including the closure of some of the company’s R&D sites. Details of the sites affected have not yet been disclosed. 

’From R&D we anticipate that 3,500 positions will be affected by the process, however we are estimating that the net reduction will be approximately 1,800 positions after people move within the company,’ Abigail Baron, a spokesperson for AstraZeneca, told Chemistry World. Staff will also go from areas such as sales, marketing, manufacturing and distribution. 

Nigel Borshell, a senior advisor at consultancy firm PharmaVentures, says the additional job cuts do not come as a surprise. ’Over the next four to five years, products that AstraZeneca are selling that account for $7 billion [?4.3 billion] of sales annually will come off of patent,’ he says. And ’their pipeline products don’t really fill the gap’. 

One of the blockbusters that will be causing concern, says Borshell, is the schizophrenia drug Seroquel that comes off patent in 2012 and is worth $5 billion in sales annually. 

To populate their pipeline, AstraZeneca will be continuing to seek more collaboration opportunities with other companies, including forming licensing partnerships and co-developing drugs. ’We’re looking to strike a balance between internal and external opportunities,’ says Baron. 

According to Borshell AstraZeneca are far from unique in taking this approach. ’Rather than spend money on really early research, companies hold onto their money and try and use it wisely in terms of external deals that will buy in things that will kick the share price up again,’ he explains. 

Thanks to the ongoing restructuring the company has been undertaking, in 2009 annual savings reached $1.6 billion. The changes announced today are expected to lead to additional annual savings of $1 billion per year by 2014. 

The overall headcount reduction isn’t as bad as it might seem, according to Baron, as since the restructuring process began an additional 8,000 positions have been created in different areas such as biologics. ’We are reallocating our resources in some areas where we think there is additional value to be had,’ says Baron. 

News of the cuts somewhat overshadowed announcements regarding AstraZeneca’s financial performance - the firm reported operating profits for 2009 of $11.5 billion (24 per cent up on 2008) and revenues 7 per cent higher than 2008 at $32.8 billion. 

Nina Notman