Wednesday, August 20, 2014
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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

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.

David Sell
About this blog
David Sell blogs about the region's pharmaceutical industry. Follow him on Facebook.

For Inquirer.com. Portions of this blog may also be found in the Inquirer's Sunday Health Section.

Reach David at dsell@phillynews.com.

David Sell
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