AstraZeneca to cut 7,300 more jobs amid fourth-quarter profit drop
Drug-maker AstraZeneca, with facilities in Wilmington and Newark, Del., said it will cut 7,300 more jobs because of declining fourth-quarter profit and prospects for 2012.
AstraZeneca to cut 7,300 more jobs amid fourth-quarter profit drop
David Sell
AstraZeneca, based in London but with facilities in Wilmington and Newark, Del., said Thursday morning that it will cut 7,300 more jobs worldwide because of declining fourth-quarter profit and prospects for less revenue in 2012 in its pharmaceutical business.
Chief Executive David Brennan attributed the struggles to generic competition brought on by branded drug patents expiring and government insurance programs reducing reimbursements.
"While the further expected losses of market exclusivity make for a challenging 2012 outlook, we remain committed to a long-term, focused, R&D based strategy, and today we have announced further steps to drive productivity in all areas to improve returns on our investment in innovation,” Brennan said in a statement.
The company said research and development operations would close at facilities in Montreal and Sodertalje, Sweden, with a net impact of 2,200 job cuts.
Beyond that, officials would not specify how many cuts will occur at other facilities. But in a conference call with reporters, Brennan said there would not be the same sort of big changes to R&D in Delaware.
"Wilmington continues to be very important to us, especially in clinical development, and we expect it to be for the foreseeable future," Brennan said.
In trying for greater cost efficiency, the company is reducing the regional management groups from five to three - North America, Europe and Asia/Pacific.
Tony Zook, the executive vice president of global commercialization, said the Wilmington office will handle the North American regional chores, adding Canada and Latin America. The Wilmington office had cuts late in 2011. This shift won't greatly change the workforce in Wilmington, Zook said.
The cuts announced Monday are the third set of layoffs since 2007 and will bring the three-part total to 28,900. The two previous rounds of layoffs involved 12,600 and 9,000 employees, respectively.
Thursday's layoffs would be in the supply chain, sales, administration, and research and development, with an estimated yearly cost savings of $1.6 billion by the end of 2014.
AstraZeneca reported a 2011 full-year operating profit increase of 11 percent, but a fourth-quarter drop of 10 percent. The full-year revenue for 2011 increased by 1 percent, but only because currency exchange rates.
http://asdasasd.com fasdfzxcvasdgd asgf asg— generic health- Big pharma is strictly profits on poison. I empathize with the employees facing another round of layoffs.— starlight
- The US is turning into a 3rd world country thanks to both government incompetence and corporate greed.— moretoit
Comment removed.- Didn't Big Pharma give a huge concession in pricing to the Government? That concession KILLED JOBS! That's what Obama and Obamacare has to do with this!!!— gone with the wind
- Your post shows a complete lack of knowledge of Pharma. The lion's share of the jobs lost had nothing to do with ObamaCare and most occurred long before Obama was in office. Big Pharma has moved much of their manufacturing and R&D to China & India which led to a loss of US jobs. As tdoc & MG77 alluded to the industry was not developing blockbuster drugs like they did in the 80's this led to a reduction in sales & marketing jobs. As for pricing concessions, Pharma sells their products to other countries at a much cheaper rate than here. The international price constraints along with your managed care health plan requirements that generics be used 1st line affected the bottom line far more than Obamacare (which btw isn't really in place yet)
As much as people like you love to make things political, this is an industry issue not a political one.— mtairy1 - What does Obama remotely have to do with the model of big blockbuster drugs coming to a grinding halt and the failed business model of Big Pharma? Health care reform also has little impact on pharmaceutical spending one way or another either so far. Typical nonsense you see so often.— MG77
- mg77. i was thinking the same thing. Blaming Obama is little more than a lame excuse for having no knowledge of the business side of the pharma industy. Since its no secret that most big pharma companies have been attempting to retool their business models for decades with little success, a broad swipe "it obamas fault" shows only a vauge understanding of the issues. — tdoc
- As a nearly 20 yr employee of pharma, most of it in management I can tell you this has very little to do with Obama. This slide began during the 1st Bush administration picked up pace during the Clinton administration and continued thru Bush II & Obama.
It is not the result of politics, it's the result of 1) bloated marketing driven companies that had far too many employees to begin with 2) Big Pharma's me-too mentality. Rather than focus on scientific breakthroughs they focused their R&D on the 7th cholesterol lowering statin or the 6th erectile dysfunction drug. 3) outsourcing of manufacturing & research facilities to China & India 4) The international market and to some extent managed care in the US imposed price constraints & Pharma did a poor job planning for these issues. Unfortunately lack of vision & poor decision making at the executive level almost always leads to downsizing & massive layoffs.— mtairy1 - They layoffs/restructuring have nothing to do with a company losing money, it has to do with them not making enough profit. It's why our whole company tax structure here needs to be overhauled for business and just tax profits. If you want to have 10% of less profit, you don't have to pay taxes, above that? The government should increase the tax exponentially. And profits would be defined as income derived from sales/services in the US versus the cost to manufacture/market/sell those goods/services. Anything made outside of our borders doesn't count in cost. AstraZeneca is just the latest corporation to do the whole "cost-restructuring" so we can still meet market expectations.— sjnative94
- Let's call a spade a spade: a good portion of the continued "restructuring" of pharma in order to maintain profits while it kowtows to left wing outcries resides at the door step of the AMA and its members. Companies and corporations are in business to earn profits and keep stock holders happy. Those "stock holders" are you and me. What's that you say, you don't own pharma stock? I suggest you check the investment areas of your IRA's, 403b's, etal.— lefty
- Hope and Change; geez, I HOPE things CHANGE in November of 2012.— STEPHEN1988
- Hope and Change; geez, I HOPE things CHANGE in November of 2012.— STEPHEN1988
- And Obama smiles from ear to ear...his focused destruction of the private sector continues with success. Less profits in pharma will eventually lead to less R&D money and less advanced products in the future. But hey, government is in control....just as Obama dreamed. Hope & change!— kelprod2
- Remember the media supported outcry a few years ago, PRIOR to the recession, bemoaning sales practices of big pharma? Remember how a handful of outspoken docs and medical schools decried the lunches, speakers'fees, etal? Remember the layoffs which followed? Now, I ask you, have we witnessed any significant changes in the cost of meds? No, what we've witnessed is the sacrificing of hundreds of thousands of good paying jobs to the false prophets who predicted economic nightmares if the pharma industry continued its then current practices. Shame on our govt for falling prey to interest groups bent on pursuing a restructuring of social responsibility. It's sure coming at a great cost, isn't it?— lefty
- Hopeless and Changeless...
(Shameful that philly.com is blocking comments from certain IP addresses... but I can get around it...)— fafafooey - Sorry to hear the news.— thesomersteam
- No unions, so no politicians expressing outrage?— JW
- yet we are told we have too few scientists and we need more visas for foreign scientists. There aren't any other R&D companies picking these people up either. Smart ones got gov't jobs overseeing Pharma years ago— jrwute42
- What Sell and the INQ have never covered in detail is the impact that the loss of multiples of 10s of thousands of real knowledge based and skilled jobs have had on our Region, it goes neyond numbers, to haousing values (hence wealth), medical care and access, education and property taxes, hence infrastructure quality of life, and regioonal investment. In another words our Region is being desciomated by this trend of the past 7-8 years. It will be worsened by Reid/Pelosi Care that most of our Congress Representatives supported--particularl the PHL counties and Alyson Schwartz--our own Black Mariah!— Obamasfool
- Obamasfool is another example of our failed educational system. — Speedqueen Mistress
- What Sell and the INQ have never covered in detail is the impact that the loss of multiples of 10s of thousands of real knowledge based and skilled jobs have had on our Region, it goes neyond numbers, to haousing values (hence wealth), medical care and access, education and property taxes, hence infrastructure quality of life, and regioonal investment. In another words our Region is being desciomated by this trend of the past 7-8 years. It will be worsened by Reid/Pelosi Care that most of our Congress Representatives supported--particularl the PHL counties and Alyson Schwartz--our own Black Mariah!— Obamasfool
- Damn you, Boston Consulting!!! Although we were all warned 10 years ago that this would be the new Pharma model, we just didn't foresee the bloodshed and layoffs.— Col. Nathan R. Jessup
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