Merck - Top 5 layoffs of 2008

Company: Merck
Layoffs: 8,400

Summary: Merck's layoffs came in two waves. In May, the drugmaker cut about 15 percent of its sales positions, or 1,200 jobs. Merck cited the rejection of Cordaptive and lingering Vytorin woes, which contributed to significantly lower sales of the blockbuster drug. In addition, the company says that it completed the launch of eight meds and vaccines since 2006, and needed to scale back the forces for those products.

A second, much bigger wave came in October. Following the announcement of a 28 percent drop in Q3 earnings, Merck said it would cut 7,200 jobs--more than 12 percent of its workforce--as part of a broader company-wide restructuring plan. Third-quarter revenue was down 2 percent, partly due to sluggish sales for most of its vaccines, major generic competition for Fosamax and a drop in its cholesterol drug sales of about 15 percent to $1.1 billion.

The job cuts included 6,800 employees and 400 vacant positions in all areas of the company. Forty percent of the cuts are in the U.S. and 25 percent will be senior and mid-level execs. The layoffs are scheduled to be completed by 2011. Merck expects restructuring costs from $1.6 billion to $2 billion through 2010, but hopes to save between $3.8 billion and $4.2 billion by 2013

Though substantial, the 2008 layoffs are still less than the 10,400 cuts Merck made in 2005 in the wake of the Vioxx disaster.

Merck Timeline
> Merck to cut 7,200 jobs
> Analyst gloomy on Merck trends
> Merck, Schering-Plough stocks take a dive
> More bad Vytorin news for Merck, Schering
> Merck to cut 1,200 sales reps
> Companies saw Vytorin threat in 2005