Merck Announce Cut of 8,500 Jobs
Merck & Co have unveiled plans to cut around 8,500 jobs, in addition to previously-announced cuts of 7,500 roles, in an attempt to decrease costs and improve competitiveness.
Merck are expecting to make $2.50 billion in yearly cost savings by the end of 2015 and the majority of this will come from a reduction of marketing and administrative expenses and R&D.
The staff reductions will result in a reduction of roughly 20% in Merck’s total global workforce of 81,000 employees, and the new restructuring is expected to cost between $2.50 and $3.00 billion.
The organisation noted that they are “adopting a significantly streamlined and more flexible cost structure and operating model in response to business challenges and the rapidly changing external environment.”
Chief Executive Officer, Ken Frazier, confirmed that Merck will be focusing on diabetes, acute hospital care, vaccines and oncology and is creating a “new, integrated unit” to prepare for a successful launch of MK-3475.
In addition to MK-3475, Merck are concentrating their efforts on BACE for Alzheimer’s disease (MK-8931), their next generation hepatitis C programme and V503, the company’s nine-valent HPV vaccine.
Geographically, Ken Frazier revealed that Merck will increase their focus in “ten prioritised markets”, namely the USA, Japan, France, Germany, Canada, UK, China, Brazil, Russia and Korea.
Merck confirmed that they will “out-license or discontinue selected late-stage clinical development assets and reduce its focus on platform technologies.” It will also make “externally-sourced programmes a greater component of its pipeline strategy.”
Having announced a year ago that Merck would relocate their global headquarters from Whitehouse Station to a different site in Summit, New Jersey, Merck have now announced that they will close both of these sites and move everything to the campus in Kenilworth, New Jersey.