Merck axes 8,500 more jobs
pharmafile | October 2, 2013 | News story | Medical Communications, Research and Development, Sales and Marketing | Jobs, Merck, R&D, cuts
Merck has announced the loss of 8,500 jobs as it targets savings of $2.5 billion by the end of 2015.
Combined with the 7,500 positions axed since 2011, Merck is now looking at a 20% slimmer workforce. The most recent cuts come amid concerns by analysts that the company needs to further tighten its belt.
Chief executive Kenneth Frazier described the decision as ‘difficult’ but maintained that “these actions are essential to ensure that Merck can continue to fulfil its mission into the future”.
Reuters reports that half of the job losses will affect research and development, a department previously sheltered from cuts.
The move has most likely been prompted by recent high-profile R&D disappointments, such as failed migraine drug telcagepant and cholesterol pill Tredaptive (extended-release niacin/laropiprant), which was withdrawn earlier this year due to safety concerns.
The company will now focus its resources on research areas with the highest potential for growth, such as oncology, diabetes and vaccines. Projects showing little potential, including some late-stage clinical trials, will be terminated.
Sales-wise, Merck will limit its international outlook and concentrate on its ten most lucrative markets: the US, Japan, France, Germany, Canada, the UK, China, Brazil, Russia and Korea.
The New Jersey-based pharma giant has recently seen revenues plummet on a number of its biggest earners. Most notably, sales of blockbuster asthma pill Singulair took an 80% nose-dive last year after generic competition muscled in on the market.
The company’s pipeline has also experienced numerous recent blockages. Promising products such as osteoporosis drug odanacatib, anaesthetic Bridion (sugammadex) and insomnia pill suvorexant have all failed to make it past regulators in the last 12 months – some after several attempts.
Merck joins a number of other major pharma firms making significant staff cutbacks. Last year AstraZeneca announced the loss of 7,300 jobs by 2014, Pfizer is in the middle of shedding 6,000 workers in its manufacturing arm, and Sanofi will cut 900 of its French workforce by 2015.
The company will also sell off some of its property to further reduce costs, with cheaper options now being evaluated for the planned relocation of its global headquarters.
Hugh McCafferty
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