Valeant to fire thousands, restructure ops after Bausch buyout
Valeant Pharmaceuticals ($VRX) has laid out its plans to integrate the newly acquired Bausch + Lomb into the corporate family. And true to form, CEO J. Michael Pearson is bringing out the ax to lop off anywhere from 10% to 15% of the overall workforce, or up to 2,700 jobs.
|Valeant CEO J. Michael Pearson|
Overall, Pearson aims to squeeze $800 million in costs out of the combined company to help pay for the $8.7 billion acquisition.
Valeant's latest financial records indicate the company has about 7,000 workers, while Bausch + Lomb has more than 11,000, according to news reports. At the high end, the reorganization could claim up to 2,700 staffers. Valeant will also relocate and consolidate operations, including facilities acquired with its recent buyouts in dermatology and cosmeceuticals, Medicis and Obagi.
The exodus includes a number of corporate executives, including R&D chief Sue Hall, who is "retiring." B&L execs Mike Gowen and Rod Unsworth--also on the way out--have agreed to help with the transition, while Hall will consult on efinaconazole, a nail fungal treatment recently rejected by the FDA due to manufacturing issues.
Valeant is keeping the Bausch + Lomb name, bringing the company's global pharmaceuticals chief Dan Wechsler into Pearson's corporate executive team. While Valeant's corporate HQ will remain in Quebec, its U.S. headquarters and new U.S. Eye Health business will operate in New Jersey, Pearson said in a letter to employees filed with the Securities and Exchange Commission. Medicis will be relocated to New Jersey as well. Obagi will stay in California, but it will be consolidated to one combined Valeant/Bausch + Lomb location.
"Over $800 million of cost synergies are expected to be realized," Pearson said in the letter, with "well north of $500 million" to be realized this year. The rest of the cost savings "is expected to be captured in 2014, without any reductions in the Bausch + Lomb North American field force or any material changes to the other field forces around the world," he added.
Pearson has a fearsome reputation for making deep cuts to help pay for the cost of a series of buyouts. At Medicis, for instance, layoffs started almost immediately upon the deal's closing. With this latest purchase, he's set his sights on building a company with $20 billion in annual revenues. And he's determined to carve out substantial profits in the process.
- get Valeant's SEC filing
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