The good news for Merck & Co.'s ($MRK) far-flung workforce: The job cuts hanging over your heads for the past 5 years are almost finished. The not-so-good news: Several thousand payroll reductions are yet to come.
|Merck CEO Kenneth Frazier|
In its latest quarterly filing, the Whitehouse Station, NJ-based drugmaker offered an update on the two major restructuring plans it's working through, including job tallies and costs. The overall picture? Merck has cut 36,450 jobs since 2010. That's almost half the size of its current workforce, though a much smaller fraction of the combined Merck-Schering payroll in 2009.
Many of those reductions were outright layoffs, though contract workers were also let go and vacant positions eliminated. And the company estimates it has 3,795 cuts left to go.
Meanwhile, Merck has spent almost $10 billion on its efforts to revamp the company since 2010, most of it in a big overhaul announced after its 2009 Schering-Plough merger. Two-thirds of those costs were cash outlays, mostly related to those job cuts--and that would include severance payments.
As the two restructuring plans wrap up over the next 18 months or so, Merck expects another $600 million in costs, the filing states. Most of the remaining job cuts target manufacturing, with 2,585 left to go by the end of 2016, the company says. That's out of an overall merger-related restructuring that initially targeted 29,000 jobs.
The other remaining cuts come in the restructuring Merck rolled out in 2013, targeting 8,500 positions. With 7,290 cuts made, that leaves 1,210 left to go, if Merck follows through on all of them.
Merck's revamp hasn't been all about job cuts, though. The company has remade itself in other ways since the Schering-Plough deal. As Merck lost revenue to patent expirations--ending 2014 with $42 billion--it also suffered some R&D failures that raised collective eyebrows. But its first-in-class approval for the immuno-oncology therapy Keytruda--and to a lesser extent, its forthcoming hep C franchise--have helped turn that around.
CEO Kenneth Frazier has also been on a slimdown quest, hiving off consumer health to Bayer and narrowing the company's overall focus to immunology, vaccines, diabetes, emerging markets and hospital meds. The latter would include the Cubist lineup Merck acquired in that buyout, including Zerbaxa for hospital-acquired infections and Sivextro, a skin-infection drug approved since the deal closed. And in immunology, the company recently inked a $650 million deal with cCAM Biotherapeutics, which is studying an antibody similar to Keytruda.
- read the Merck filing
Special Reports: Top 15 pharma companies by 2014 revenue - Merck | Top 10 pharma companies by employees - Merck