Merck is slashing more than 10 per cent of its workforce as it tries to increase efficiency.
Beleaguered US pharma giant, Merck & Co., has announced new restructuring plans that will see the company cut 7,200 jobs in an effort to save up to $4.2 billion (?2.5 billion) over the next five years.
The restructuring plans were announced along with the news that Merck’s net income for the quarter had plummeted to just over $1 billion, down nearly 30 per cent compared to the $1.5 billion reported in the third quarter of 2007.
This round of job cuts, which will see more than a 10 per cent reduction in the company’s workforce, is just the latest piece of bad news to come from the pharmaceutical sector. GSK announced in September it will shed 850 research jobs, while Pfizer is in the midst of a major restructuring exercise.
’If we don’t change the business models, we’re not going to survive as an industry,’ Richard Clark, Merck’s chief executive, told investors and analysts.
The cuts at Merck will affect all areas of the company and are in addition to the 10,400 positions that were slashed as part of its 2005 restructuring plans that were completed in September.
Middle management has been specifically targeted for a 25 per cent reduction in personnel, while manufacturing and research efforts will also be affected.
The company has said it will ’further focus its [manufacturing divisions] capabilities on core products and outsource non-core manufacturing’ while ’enhancing research operations to expand access to worldwide external science’ that will involve the closure of three basic research sites in Tsukaba, Japan; Pomezia, Italy; and Seattle, US, by the end of 2009.
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