Swiss drugmaker Novartis said yesterday it plans to cut 2,500 jobs in a restructuring program aimed at generating yearly cost savings of US$1.6 billion.
Many of the cuts, which will take place next year and 2009, will be achieved through normal fluctuation in staffing levels and social programs, a statement said.
The Basel-based firm, one of the world's biggest drugmakers in both patent-protected and generic medicines, employs around 10,000 people.
Novartis said it will book a pre-tax restructuring charge for the cuts of around US$450 million in the fourth quarter.
In the third quarter it reported a 12 percent drop in net profits to US$1.6 billion, worse than expected by analysts.
Novartis, which announced a first round of job cuts in October, has fallen 8.8 percent in Zurich trading this year, hurt by the delay of the diabetes medicine Galvus, the withdrawal of the irritable bowel treatment Zelnorm, and the failure to win approval for the Prexige painkiller. Competition from generic medicines threatens products including the heart treatment Lotrel and anti-fungal Lamisil.
"In general, now is not a good time in big pharma," Denise Anderson, an analyst at Landsbanki Kepler, said in an interview. "Sales and profitability are slowing, and the company doesn't see it as a short-term thing."
The Swiss company isn't the only pharmaceutical company making changes after delays to new products.
In July, London-based AstraZeneca Plc announced plans to reduce its workforce by about 11 percent. Pfizer Inc, the world's biggest drugmaker, is cutting 10,000 positions. GlaxoSmithKline Plc, also based in London, is eliminating jobs in sales, manufacturing and research to save US$1.43 billion.
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