UPDATED: Pfizer shrinking severance pay amid major cutbacks

Pfizer ($PFE) employees can expect less in their severance packages if they get the boot later this spring. The U.S. drug giant means to cut deeply into its operations this year, and it apparently doesn't want layoffs to be as expensive as previous worker cutbacks.

Workers at the drugmaker got the chilling news in a memo last week, Bloomberg reported, having obtained a copy of said memo from one of the employees. After May 14, severance pay drops from 12 weeks to 8 weeks for U.S. employees and health benefits will run dry after 8 weeks instead of a year.

Amid a dizzying number of layoffs in pharma, angst over job security across the industry has been common, understandably. And the Pfizer memo comes after CEO Ian Read (photo) vowed to cut $1 billion in operating expenses at the drugmaker this year, following 26,000 jobs cut over the past three years (or roughly since Pfizer acquired Wyeth in a historic megamerger).

Pfizer employees can only hope their numbers won't be called as Read and his deputies continue the cost-cutting moves that hacked off $642 million, or 5%, of operating expenses in 2011. The pressure is on this year to reduce expenses, in part because the company is facing new generic competition to its best-selling cholesterol pill Lipitor.

As cutbacks hit R&D and other units at the company, Read's pay has grown rapidly, Pharmalot notes. Read, who took over as CEO in late 2010, saw his pay jump 44% to about $25 million last year.   

- read the Bloomberg article
- and the Pharmalot post

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