Novartis to cut 500 Swiss pharma jobs, then staff up in OTC, generics

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Novartis ($NVS) is reshuffling its cards in Switzerland. To cover new drug launches, both branded and generic, the company is cutting 500 jobs in its pharma division and hiring up elsewhere. It's the latest job-trimming move at the Swiss drugmaker, which has shed thousands of jobs over the last several years.

Mindful of the political environment in Switzerland, where recent job cuts have triggered street protests and sit-ins, Novartis was careful to explain that any jobs lost in its home country will be made up with new hires. While it's cutting support jobs at headquarters and more in R&D, Novartis plans to add several hundred employees in over-the-counter manufacturing, generics supply chain management, and cancer drug development.

"This is not a traditional restructuring with the primary goal of cost savings and staff reductions," said Thomas Boesch, Novartis HR chief in Switzerland. "The point is to optimally focus our resources."

Of course, Novartis is in the midst of a strategic review, which could result in much bigger changes--the sale of its vaccines and animal health divisions, for instance. In the meantime, Novartis is launching a $5 billion stock buy-back program and plans to set up new business segments to focus on dermatology, heart failure, respiratory disease and cell therapy. Not coincidentally, those new segments will see new hiring.

Some of the new Swiss jobs will rev up its Sandoz generics unit to launch at least one new product, possibly the lung drug AirFluSal Forspiro, a generic version of GlaxoSmithKline's ($GSK) Advair recently approved in several European countries. Novartis' pharma division will get additional staffers to help roll out new branded products for respiratory ailments, lung cancer, skin disease and heart disease, the company said. Among its branded drugs awaiting regulatory approval are serelaxin, a treatment for heart failure, and secukinumab, a psoriasis therapy.

Meanwhile, its over-the-counter manufacturing will also benefit, the company said. Novartis has already been moving some consumer drug production to Fribourg, Switzerland, from its troubled plant in Lincoln, NE.

The net effect, says Novartis: Employment in Switzerland will remain at around 15,000. The company will try to minimize actual layoffs, possibly through early retirements and attrition. Those who lose their jobs will participate in "a generous social plan including severance payments."

In early November, Novartis said it would cut up to 371 R&D jobs in the U.K., plus as many as 72 in sales and marketing there. And in 2012, Novartis announced 2,000 job cuts in the U.S., most of them in sales, as it prepared for generic competition for its blood pressure blockbuster Diovan.

- see the release from Novartis (in German)

Special Reports: Top 10 Pharma Companies by Employees - Novartis | The top 10 pharma layoffs of 2012 - Novartis

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