Lilly cutting 5,500 jobs, costs by $1 billion

According to Reuters, Eli Lilly and Co plans to cut 5,500 jobs, or 13.5 percent of its workforce, in a restructuring meant to bolster the company as it girds for generic competition by late 2011 on its top-selling Zyprexa schizophenia drug. The drugmaker’s revenue outlook has been dimmed by competition for its Byetta diabetes drug and safety concerns for its recently approved Effient blood clot preventer. The company plans to shrink its workforce to 35,000, from its current strength of 40,500, by the end of 2011. But the new headcount does not include any new sales force additions in fast-growing emerging markets and Japan, Lilly said. Lilly said it would create a new organizational structure by January 1, with five global business units. They include oncology, diabetes, emerging markets, established markets and its Elanco animal health business. The company has a long-standing focus on diabetes and cancer, and both are hot areas because of the aging population and the hefty price tags of those drugs. Lilly hopes to cut annual costs by $1 billion per year over the same time.