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Wyeth sharpens axe
NEW YORK—Wyeth is the latest big pharma company to sound the alarm that major job cuts are in the cards, amidst a series of drug approval setbacks and erosion on profits from generic competition.
The drugmaker has said it may cut up to 10 percent of its work force—the equivalent of 5,000 jobs—over the next three years, although as yet, "nothing is etched in stone," according to Wyeth spokesman Doug Petkus.
"While the company plans to share the details of this initiative with employees towards the end of March, it is possible that over a three year period, a reduction in force equal to about 10 percent of current positions could occur," says Petkus.
Wyeth, based in Madison, N.J., has 50,000 employees worldwide. Petkus adds it is premature to discuss how many or which positions will be affected or how the reductions will be achieved.
Petkus also points out the company is considering job cuts as part of a planned restructuring, but he didn't say how much money Wyeth plans to save.
According to Petkus, the company would go into more detail at its March meeting with employees.
Wyeth last made large job cuts in 2005 when it reduced its U.S. sales force by 15 percent. Now, the firm is being motivated to make changes again, spurred by a series of setbacks it has experienced in getting four of its drugs to market over the past year.
Since the beginning of 2007, the FDA has delayed granting regulatory approval for a number of Wyeth drugs including schizophrenia drug Bifeprunox; Pristiq, a treatment for depression and menopause symptoms; Viviant, a drug to treat bone loss; and anti-constipation medicine methylnaltrexone.
Moreover, its kidney cancer treatment Torisel; and Lybrel, a contraceptive, also experienced regulatory delays before finally being approved.
Similar cost-cutting efforts have become de rigueur for big parma, with several drug companies embarking on multi-billion dollar restructurings, resulting in thousands of job cuts across the industry.
Over the past year or so, several of its peers, including Bristol-Myers Squibb, AstraZeneca, GlaxoSmithKline, Pfizer, Merck & Co., Roche, Bayer and Abbott have also announced changes to the face of their businesses in order to continue to compete in this fast-changing industry.
All these firms have been affected by the soaring costs of drug development and generic competition that are increasingly exerting pressure on company purse-strings and squeezing profits.