Amgen to wield axe on 2,900 jobs
pharmafile | July 30, 2014 | News story | Manufacturing and Production, Medical Communications, Research and Development, Sales and Marketing | Amgen, Enbrel, Prolia, job cuts
Amgen has announced this morning that it will make swingeing cuts in the US over the next two years as it also plans to cut manufacturing plants in two states.
Amgen says the large restructuring plan is being undertaken in order to “invest in continuing innovation and the launch of its new pipeline molecules”, whilst also improving its cost structure.
The US biotech firm says the first step will be to reduce staff by 2,400-2,900, beginning later this year and continuing through 2015, and will affect staff predominantly working in the US.
This will see around 12% to 15% of Amgen’s global workforce potentially face the axe – the company says it will also close its facilities in the US states of Washington and Colorado.
Other cuts, according to Amgen, will come from “streamlining the organisation, reducing layers of management, increasing managerial spans of responsibility and beginning implementation of a revised geographic site plan”, although further details were not released.
The job reductions announced today are in addition to those made in March when the firm said it would cut 252 sales and corporate positions. It also previously announced that would abolish an additional 70 information service jobs in June.
Robert Bradway, chairman and chief executive of Amgen, says: “The talented staff members at these locations have made enormous contributions to advancing biotechnology over the years and the surrounding communities have been very supportive, so it is with great reluctance that we acknowledge the need to exit.
“At each site, we are actively engaging in discussions with third-parties about potential future use of the facilities.”
Amgen adds that it will take a pre-tax charge of $775 million to $950 million for the costs of the restructuring.
Financial results
The announcement came with its second quarter results, which showed revenue increased an impressive 11% to $5.2 billion.
Mark Schoenebaum, an analyst with ISI Group LLC in New York, says in a note to clients that the job cuts are ‘just as important’ for Amgen as the revenue increase, and predicts they will add to profits this year and beyond.
The higher-than-expected earnings were driven by sales of Enbrel (etanercept), the company’s top drug for arthritis, which increased 7% to $1.2 billion, beating analysts’ projections of $1.1 billion.
Its bone drugs Prolia (denosumab) also achieved a highly impressive 40% growth, reaching $264 million for the quarter.
Ben Adams
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