BMS joins new layoff parade with 800 cuts
In the second layoff announcement this week, Bristol-Myers Squibb said it will cut its workforce by three percent over the next six months. It's part of a "streamlining initiative" at the drugmaker, which faces generic competition for its top-selling drug, Plavix, in 2012. By our calculations, the number of jobs cut from Bristol's 28,000-strong payroll will be about 840. "We're reviewing the organization across the board," spokeswoman Sonia Choi told the Wall Street Journal. "There's no specific area we're targeting."
Bristol has "streamlined" itself several times in recent years and is already in the middle of a $2.5 billion cost-cutting plan. It shed 7,000 jobs last year. "These companies get smaller and realize they can still cut more jobs to become even more efficient," Edward Jones analyst Linda Bannister told Bloomberg.
As Reuters points out, Bristol has been on the rise lately, posting fast earnings growth because of the aforementioned cost-cutting and strong sales of Plavix, the antipsychotic drug Abilify, and others. But Plavix is a $6.5 billion drug, co-marketed with Sanofi-Aventis. Losing it will leave a big hole the company has been working hard to fill, snapping up biotech companies as part of its "string-of-pearls" strategy.
The rest of Big Pharma has been cutting jobs, too; some, like Abbott, are laying off workers as they integrate newly acquired businesses. Others are simply retrenching. It's all part of preparing for the fight ahead. As Bannister put it, "With the patent cliff all these companies are facing, they need to reduce costs as quickly as possible to navigate what is going to be a very challenging couple of years for the industry."