Merck to cut nearly 12,000 jobs
By Crissa Shoemaker DeBree
Staff writer
| Posted: Friday, July 29, 2011 11:15 am
Merck & Co. will eliminate nearly 12,000 jobs — about 13 percent of its workforce — by 2015 as part of a restructuring plan.
The job cuts come on top of an earlier announcement that about 20,000 jobs have been or will be eliminated as part of the Whitehouse Station, N.J., drugmaker’s ongoing plan to trim costs following its merger with the Schering-Plough Corp.
“For our people, this won’t be easy,” president and CEO Ken Frazer said during a conference call. “But the realities of our environment dictate the need to operate more flexibly and nimbly from a lower cost base. We’re taking these difficult acts now so we can grow profitability and continue to deliver on our mission well into the future.”
Frazer said the job cuts will come “disproportionately” from non-revenue generating positions such as administration and headquarters personnel, the consolidation of office facilities and the ongoing closure of facilities, including animal health sites.
It’s unknown how those cuts will affect Merck’s operations in Montgomery County. It employs about 10,000 people there, most at its sprawling West Point plant in Upper Gwynedd.
The cuts will save the company $1.3 billion to $1.5 billion by 2015, Frazer said. Merck’s previous restructuring plan, which began in February 2010, is on track to save $3.5 billion by the end of next year.
“Beyond this, however, we believe we need to do more,” Frazer said. “We are committed to growing our company. To do that, we are moving on from our initial merger targets to focus even more aggressively in reducing our cost structure, so we can continue to invest in profitable growth.”
The merger plans appear to be paying off.
The company said Friday its second-quarter profits were $2.02 billion, or 65 cents a share, up from $752 million a year ago. Excluding one-time items, earnings were 95 cents a share, up from 86 cents a share and on target with analysts’ estimates.
Revenues for the quarter was $12.15 billion, up 7 percent. The increase was propelled by strong sales of almost all its drug products, including the arthritis drug Remicade, Januvia for diabetes and Isentress, which is used to treat HIV. The company said its sales were the highest for any quarter since the merger.
Merck raised the lower end of its adjusted annual earnings target by 2 cents; it now expects $3.68 to $3.76 a share. But it expects higher charges from restructuring, acquisition and other items.
By Crissa Shoemaker DeBree
Staff writer
| Posted: Friday, July 29, 2011 11:15 am
Merck & Co. will eliminate nearly 12,000 jobs — about 13 percent of its workforce — by 2015 as part of a restructuring plan.
The job cuts come on top of an earlier announcement that about 20,000 jobs have been or will be eliminated as part of the Whitehouse Station, N.J., drugmaker’s ongoing plan to trim costs following its merger with the Schering-Plough Corp.
“For our people, this won’t be easy,” president and CEO Ken Frazer said during a conference call. “But the realities of our environment dictate the need to operate more flexibly and nimbly from a lower cost base. We’re taking these difficult acts now so we can grow profitability and continue to deliver on our mission well into the future.”
Frazer said the job cuts will come “disproportionately” from non-revenue generating positions such as administration and headquarters personnel, the consolidation of office facilities and the ongoing closure of facilities, including animal health sites.
It’s unknown how those cuts will affect Merck’s operations in Montgomery County. It employs about 10,000 people there, most at its sprawling West Point plant in Upper Gwynedd.
The cuts will save the company $1.3 billion to $1.5 billion by 2015, Frazer said. Merck’s previous restructuring plan, which began in February 2010, is on track to save $3.5 billion by the end of next year.
“Beyond this, however, we believe we need to do more,” Frazer said. “We are committed to growing our company. To do that, we are moving on from our initial merger targets to focus even more aggressively in reducing our cost structure, so we can continue to invest in profitable growth.”
The merger plans appear to be paying off.
The company said Friday its second-quarter profits were $2.02 billion, or 65 cents a share, up from $752 million a year ago. Excluding one-time items, earnings were 95 cents a share, up from 86 cents a share and on target with analysts’ estimates.
Revenues for the quarter was $12.15 billion, up 7 percent. The increase was propelled by strong sales of almost all its drug products, including the arthritis drug Remicade, Januvia for diabetes and Isentress, which is used to treat HIV. The company said its sales were the highest for any quarter since the merger.
Merck raised the lower end of its adjusted annual earnings target by 2 cents; it now expects $3.68 to $3.76 a share. But it expects higher charges from restructuring, acquisition and other items.