Over the last week or so, we've seen three Big Pharmas announce big changes to their research operations--and those big changes include big job cuts. Big cost savings, too, the companies say.
The new cuts are hitting the news along with pharma earnings, which, so far, have been more than respectable. It's 2010 that everyone's worried about. Analysts haven't been cheering with delight at any Big Pharma sales-and-profits forecast for the year. AstraZeneca expects earnings to decline. Pfizer says its 2010 profits growth won't be what analysts had expected, given the Wyeth buyout, and nor will 2012 numbers; the predictions brought its stock down 2.5 percent. Roche predicted a "disappointing" mid-single-digit increase in 2010 revenues.
That is why the companies have to disappoint their employees by cutting more jobs and shutting down more facilities. Pfizer says it's going to whittle R&D by up to $3 billion as it continues to absorb Wyeth; those cuts are part of an overall $7 billion in cost savings it's hoping to shed, what with Wyeth-related cuts and its previously planned restructurings. Meanwhile, AstraZeneca plans to cut more than 3,000 R&D jobs by 2013 and shutter facilities along the way as part of a new phase of cost-cutting.
And now GlaxoSmithKline is embarking on a second-stage restructuring that will focus in part on boosting ROI in its research units, which means cutting costs by a further £250 million (roughly $394.3 million) or so, along with another £250 million or so on the sales-and-admin side.