Genzyme planning 1,000 job cuts
pharmafile | September 14, 2010 | News story | Manufacturing and Production, Research and Development, Sales and Marketing |Â Â Genzyme, job cutsÂ
Genzyme has said it intends to cut back its workforce by around 1,000 over the next 15 months in order to achieve “substantial annual target savings”, according to a report in the Boston Globe.
Meanwhile, the US biotechnology company also plans to sell off its genetic testing business to laboratory group LabCorp by the end of the year, in a $925 million deal that will take a further 1,900 employees off its books.
Genzyme has been hit hard of late by manufacturing compliance problems which have interrupted supply of some of its biggest brands, driving it into a second-quarter loss and forcing it to cut its 2010 revenue forecasts.
The company recently rejected an unsolicited $18.5 billion offer from Sanofi-Aventis, saying the $69-per-share bid was opportunistic and undervalued the company. While there has been speculation Sanofi may raise its offer, the latest moves suggest Genzyme has no intention of sitting back and waiting for rescue by a white knight.
The 1,000 job cuts were reportedly unveiled in an internal memo sent by Genzyme chief executive Henri Termeer to staff yesterday, according to the newspaper. An official statement had not been due to go out until next week to give time for the company to consult with the employees, and Genzyme has yet to confirm the number.
If both initiatives come to pass, Genzyme will see its workforce reduced by more than 20% from its current level of around 12,800.
Meanwhile, the company said in May that along with the genetic testing unit it also intends to divest two other businesses – diagnostic products and pharmaceutical intermediates – and confirmed yesterday that those plans “remain on track”.
Proceeds from those divestments will contribute towards a major $2 billion stock buyback initiated by Genzyme to reduce volatility in its share price. The programme is due to complete in May 2011.
Phil Taylor
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