Wyeth May Cut 10 Pct of Jobs
January 28, 2008
According to the Associated Press, Wyeth is telling managers that about 10 percent of its 50,000 employees worldwide may lose their jobs by 2011 under a planned restructuring, three years after the drugmaker scaled back its sales force.
Wyeth spokesman Doug Petkus said Friday that discussions with managers began Thursday and are continuing as the company looks for ways to transform its business, lower costs and boost growth. He said one option being evaluated is job cuts; the company has not identified other possibilities.
The job cut discussions were reported in Friday''s editions of The Philadelphia Inquirer.
Petkus said Wyeth officials plan to share details of the initiative with workers near the end of March.
Wyeth, based in Madison, N.J., has been struggling with increased competition and a shrinking pipeline of new drugs, like most of its competitors. Industry heavyweights including Pfizer Inc., GlaxoSmithKline PLC and Johnson & Johnson all have announced significant layoffs and other cost-cutting moves in the last year or two.
Wyeth has had the additional problem of repeated setbacks with U.S. regulators. Since last April, the Food and Drug Administration on four occasions has rejected approval of a Wyeth drug, demanded additional information or required an entire new study, significantly delaying expected launches of heavily touted new products.
In addition, sales of its No. 3 drug, Protonix for severe heartburn, fell 6 percent in the third quarter, to $425 million. Some generic drugmakers have been challenging the drug''s patent ahead of its expiration in July 2010, and one, Teva Pharmaceutical Industries Ltd. of Israel, could begin selling a generic version as early as next month.
Wyeth began its last cutback program in 2005, which included reducing its sales force by about 15 percent.
In October, Wyeth reported that over the first nine months of 2007, its net income rose nearly 8 percent to $3.6 billion and revenues jumped 10 percent to $16.6 billion. However, in the third quarter, profit dropped 1 percent, due to sharply higher production costs and taxes, plus a charge for ongoing restructuring, including severance pay, depreciation of some manufacturing plants and the shutdown of one factory.
When the third-quarter results were reported, company executives said they still expected full-year earnings per share to range from $3.48 to $3.56, up about 12 percent over last year.
Wyeth is to report its fourth-quarter and full year 2007 financial results next Thursday.