GEN Exclusives

More »

The Lists

More »
Feb 19, 2013

Top 10 Biopharma Layoffs of 2012

Find out which companies axed the most workers last year.

Top 10 Biopharma Layoffs of 2012

These biopharma firms had to let go of the most employees last year. [© jwblinn - Fotolia.com]

  • 2012 was not the best year for jobs, although it did get better as the year went on, going from an 8.3% unemployment rate in the U.S. in January to 7.8% in December. However, while layoffs might be happening less and less often, they’re still occurring in every industry, including biopharma. Reasons given run from “eliminating redundancies” to “restructuring”. You’ve seen lists of the top 10 pharma firms and the 10 best regions to find a biotech job; now find out which biopharma companies passed out the most pink slips last year.

    Below is a list of biopharma companies with the largest numbers of layoffs during 2012. Companies are listed in order by number of layoffs, followed by the location(s) of job cuts, the stated reason or contributing factors, the dates of announcement and occurrence, projected savings, and costs and charges attributed to the layoffs.

  • #10. Dendreon

    Total workforce reduction: More than 500 full-time and contractor jobs, primarily administrative and R&D positions 1

    Locations: Companywide, including Seattle Morris Plains, NJ

    Stated reason and/or contributing factors: Restructuring intended to align support costs with industry norms for companies of similar size and complexity, following weaker-than-anticipated sales of prostate cancer drug Provenge

    Announced: Initial layoffs announced July 30, 2012 and planned to occur over a 12-month period; Novartis deal announced December 20, 2012

    Projected savings: $150 million in annual savings

    Costs & charges: $81 million one-time charge related to cash and non-cash restructuring expenses associated with the restructuring, recorded in Q3 2012

  • #9. Pfizer

    Total workforce reduction: Number of jobs undisclosed by Pfizer, though Bloomberg News reported the number at 600, citing an unnamed source

    Locations: Across the U.S.

    Announced: Unannounced. Affected employees would have been notified by December 20, 2012, Dow Jones reported, citing an unnamed source

    Stated reason and/or contributing factors: In its January 29 press release announcing Q4 and full-year 2012 results, Pfizer cited “a reduction in the field force” along with a decrease in promotional spending, both of which it said occurred “partially in response to product losses of exclusivity and more streamlined corporate support functions.” The company has seen sales declines tied to the loss of patent protection, notably for cholesterol-reduction drug Lipitor, which generated $9.6 billion in revenue in 2011

    Projected savings: Not specified, but included within the $515 million difference—a decline of about 10%—between the nearly $4.7 billion in adjusted Selling, Informational and Administrative (SI&A) expenses incurred during Q4 2012, and the nearly $5.2 billion in adjusted SI&A expenses recorded for Q4 2011.

    Costs & charges: Not specified. Pfizer took $529 million in restructuring charges during Q4 2012 for “cost-reduction and productivity initiatives.”

  • #8. Lundbeck

    Total workforce reduction: “Around” 600 jobs

    Locations: Mostly in European subsidiaries

    Announced: June 14, 2012; “In progress” as of November 7, 2012

    Stated reason and/or contributing factors: Part of restructuring intended to create “a more flexible commercial infrastructure and to maintain cost control" ahead of “multiple future product launches,” Lundbeck president and CEO Ulf Wiinberg said in a statement. Restructuring followed decline in sales of antidepressant drug Cipralex in Europe due to competition from generics following loss of patent protection for drug, sold in the U.S. as Lexapro

    Projected savings: No figure announced

    Costs & charges: Uncertain but could amount to up to a one-time charge of DKK 500 million ($91.4 million)

  • #7. Sanofi

    Total workforce reduction: Approximately 1,000 jobs 2

    Location: 900 of 28,000 positions in France (3% of workforce) to be eliminated through 2015, mainly through voluntary measures such as early retirements, and reassignments within the company. Also includes 100 of 1,700 positions at the Laval research site near Montreal, Canada (6% of workforce)

    Stated reason and/or contributing factors: Restructuring of R&D operations intended to “establish new momentum for success in our research activities”; improve economic performance of industrial units to ensure their ability to compete in increasingly competitive vaccine markets; and streamline support functions2

    Announced: September 25, 2012, occurring through 2015 (France); January 11, 2012 (Canada)

    Projected savings: None announced specific to France and Canada. Part of five-year, €2 billion ($2.7 billion) cost-cutting initiative announced in September 2011, following $20.1 billion acquisition of Genzyme earlier that year and loss of patent protection for several blockbusters

    Costs & charges: None announced specific to France and Canada. Sanofi has disclosed a €107 million (about $146 million) charge against property, plant and equipment in the first half of 2012 toward “ongoing reorganization of Research and Development activities”.

  • #6. Roche

    Total workforce reduction: About 1,100 jobs 3

    Locations: 1,000 pharma Research and Early Development (pRED) positions in Nutley, NJ due to planned shutdown of site; 120 Applied Science jobs in Madison, WI, Iceland, and Germany; 100 Diabetes Care jobs in Indianapolis and Mannheim, Germany; 80 Pharmaceuticals Division-Global Informatics jobs in Indianapolis.

    Stated reason and/or contributing factors: pRED activities restructured to make more resources available for the growing number of products in late-stage development, and further improve efficiency. Applied sciences programs restructured following 3% year-to-year sales dip blamed on increasing competition in sequencing and a slowdown in public research funding. Diabetes care programs restructured after 4% sales slide from 2011 attributed to reimbursement cuts for blood glucose monitoring products in Europe, intensified price pressure worldwide, and other difficult market conditions

    Announced: June 26, 2012; Occurring through end of 2013

    Projected savings: CHF 370 million (about $407.4 million) annually from shutdown of Nutley facility. No other savings forecasts.

    Costs & charges: CHF 1.3 billion ($1.4 billion) toward restructurings of pRED, and Diagnostics Division’s Applied Science and Diabetes Care businesses. CHF 49 million ($53.9 million) toward global informatics restructuring, which “mainly consist of severance payments and other employee-related costs.”

  • #5. Abbott Laboratories

    Total workforce reduction: 1,250 jobs

    Locations: 700 diagnostic tests, heart stents, and pharma manufacturing jobs in U.S. and Puerto Rico; 550 established pharmaceuticals, medical devices, molecular diagnostics, and nutrition jobs worldwide

    Announced: January 25, 2012 (700-job round); October 17, 2012 (550-job round)

    Stated reason and/or contributing factors: Discontinuation of some "mature” products in the hospital and laboratory diagnostics division, part of a restructuring plan announced in 2008 (700-job round); need to align resources to better meet evolving business needs (550-job round)

    Projected savings: No projections announced for either round

    Costs & charges: Part of $332 million or 18 cent per-share charge against Q4 2011 earnings (700-job round) for "restructuring/integration/other.” Abbott said the category includes “previously announced cost reduction initiatives to improve efficiencies in the pharmaceutical, vascular, and core laboratory diagnostics businesses,” as well as “certain new efficiency programs” and the 2010 acquisition of Solvay’s pharmaceutical unit; $478 million charge against Q3 earnings, toward both 2012 layoff rounds, as well as plans to cut “several hundred” additional jobs in 2013.

  • #4. Merck KGaA

    Total workforce reduction: 1,600 jobs 4

    Locations: 1,100 positions in Germany; 500 positions in Switzerland

    Stated reason and/or contributing factors: German cutbacks were part of a company-wide restructuring announced in February, following the failure of drug candidates cladribine for multiple sclerosis and Erbitux for lung tumors; Geneva campus shutdown part of a cost-cutting consolidation following the company’s 2006 acquisition of Serono.

    Announced: September 4, 2012 (Germany); Swiss plans updated in a Tribune de Genève report of Sept. 29-30, 2012, following initial April 24, 2012, announcement of Geneva campus shutdown

    Projected savings: No figures announced

    Costs & charges: Not specified but within the €45 million ($60.1 million) recorded in Q3 2012 for company’s “Fit for 2018” consolidation initiative.

  • #3. Novartis

    Total workforce reduction: 1,960 jobs

    Locations: 330 positions at U.S. headquarters in East Hanover, NJ; 1,630 field sales positions across the U.S.

    Stated reason and/or contributing factors: Restructuring following loss of patent protection for one blood pressure drug Diovan; slowdown in sales of Rasilez®/Tekturna® (aliskiren), another blood pressure drug.

    Announced: January 13, 2012 (1,960-job round); completed during Q2 2012

    Projected savings: About $450 million annually by 2013. Novartis applied $100 million in savings to Q2 2012 results

    Costs & charges: $149 million in 2012 for restructuring of U.S. Pharmaceuticals operations.

  • #2. Takeda

    Total workforce reduction: 2,800 jobs (9% of workforce), across R&D, commercial functions and operations

    Locations: 2,100 jobs in Europe, 700 in the U.S.

    Stated reason and/or contributing factors: Restructuring operations to eliminate redundancies and positioning company toward a more diverse portfolio of newer products, following €9.6 billion ($13 billion) acquisition of Nycomed in 2011

    Announced: January 18, 2012; occurring through 2016

    Projected savings: About ¥200 billion (about $2.2 billion) over five years

    Costs & charges: Approximately ¥70 billion ($767.6 million) during FY 2012-2016, of which ¥35.489 billion ($389.2 million) in “restructuring costs” were incurred during the fiscal year, ending March 31, 2012.

  • #1. AstraZeneca

    Total workforce reduction: 7,500 jobs 5

    Locations: Worldwide

    Stated reason and/or contributing factors: Designed to “improve productivity and strengthen the company's commercial, operations and research and development capabilities.” AZ has faced declines in sales of drugs coming off patent protection, which have lost sales to generics; they include Arimidex (anastrozole) for certain types of breast cancer in postmenopausal women, heartburn drug Nexium (esomeprazole magnesium), and depression and schizophrenia drug Seroquel (quetiapine fumarate).

    Announced: February 2, 2012; occurring over two years

    Projected savings: $1.6 billion annually by the end of 2014

    Costs & charges: $2.1 billion.

    Did you get laid off in 2012?


Add a comment

  • You must be signed in to perform this action.
    Click here to Login or Register for free.
    You will be taken back to your selected item after Login/Registration.

Related content

Jobs

GEN Jobs powered by HireLifeScience.com connects you directly to employers in pharma, biotech, and the life sciences. View 40 to 50 fresh job postings daily or search for employment opportunities including those in R&D, clinical research, QA/QC, biomanufacturing, and regulatory affairs.
 Searching...
More »

GEN Poll

More » Poll Results »

Eyes on the Science Prizes

The proliferation of big-money science prizes might be seen as cheering or worrisome. Where do you stand?