Swiss Novartis to cut 2,500 jobs to lower costs

13 December 2007 09:53  [Source: ICIS news]

NEW YORK (ICIS news)--Swiss pharmaceutical major Novartis plans to cut 2,500 full-time positions worldwide and implement cost savings of $1.6bn (€1.1bn) in 2010 through its Forward plan, the company said on Thursday.

“We have taken the opportunity, given the short-term down cycle in our pharmaceuticals business, to initiate this project,” according to a statement issued by Daniel Vasella, chairman and chief executive of Novartis.

The company said it expects to simplify working processes and decision-making by “eliminating layers, concentrating on core activities and systematically capturing growth opportunities, particularly in emerging markets.”

Novartis is the latest in a string of major drug firms cutting jobs this year. In addition, Novartis is feeling the sting of profit losses in pharmaceutical revenues like its peers Pfizer, GlaxoSmithKline, Bristol-Myers Squibb, AstraZeneca, Bayer, Johnson & Johnson and Amgen.

Generics competition drove down sales of Novartis’ hypertension drug Lotrel by 34% so far this year, according to the company's nine-month financial results, released in October.

Sales for fungal-nail treatment Lamisil fell by 31%. Famvir, an anti-viral drug, and Exelon, a treatment for Alzheimer’s disease, are both involved in patent-infringement lawsuits.

“The increasingly challenging industry conditions - including continuous price pressures on drugs, increasing R&D costs, a risk-averse regulatory environment and more aggressive generics competitors - created an impetus for change that led to Forward,” Novartis said in its statement.

These changes are widespread, not just for Novartis, but for the whole of the pharmaceutical industry. Earlier this year, Pfizer said it will reduce its global staff by roughly 10,000 positions (10%) in order to save $1bn by the end of 2008.

GlaxoSmithKline announced its restructuring programme, Operational Excellence, in October. It includes closing plants, streamlining production processes and eliminating jobs to create savings of nearly $1.4bn by 2010.

Other massive job cuts by pharma majors include 7,600 positions at AstraZeneca; 6,100 positions at Bayer Healthcare; up to 4,800 positions at Johnson & Johnson; 4,300 positions at Bristol-Myers Squibb; and up to 2,600 positions at biotech firm Amgen.

($1.00 = €0.68)

By: Feliza Mirasol
+1 713 525 2653

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