Faltering Boehringer slashes 600 jobs in Germany in bid to save $580M

BI corporate headquarters in Germany

The bloodletting in Big Pharma continues with news today that Boehringer Ingelheim is planning between 500 and 600 job cuts in its home country of Germany. The cuts come just a few weeks after the company announced its sales had dropped 3% in the first 6 months of the year and full-year results would likely be down slightly from last year.

The company plans to complete the layoffs by the end of 2016, reducing costs in Germany by 15%, or about €450 million ($580 million), according to a statement acquired by Reuters. About 14,000 of Boehringer's total workforce of 47,500 are employed in Germany.

Boehringer has been struggling with a number of industry pressures, not the least of which is health reform, which has forced the company to swallow significant price reductions on its drugs. What's more, the company had to close its troubled Ben Venue plant in Bedford, OH, after having spent $350 million to upgrade it. That led to a layoff of 1,100 there.

In May, seeking to avoid the cost of protracted litigation, Boehringer paid out $650 million to settle 4,000 lawsuits alleging its blood thinner Pradaxa caused serious bleeding. But whether the drug can recover from the bad publicity remains to be seen. In the first half of the year, Boehringer's drug sales fell 5.4% to €4.8 billion ($6.4 billion)--a third of which came from its COPD treatment Spiriva.

Boehringer is far from alone in its move to drive down costs by saying goodbye to employees. In July, Amgen ($AMGN) announced 2,900 planned layoffs--a move that had been widely expected since it picked up Onyx Pharmaceuticals last year for $10.4 billion. In July, Allergan ($AGN) said it would cut 1,500 jobs in a bid to deflect Valeant's ($VRX) $53 billion hostile takeover attempt.

Other pharma companies are so desperate to cut costs they're expanding previously planned layoffs. Earlier this year, after announcing 500 job cuts in Switzerland, Novartis ($NVS), said it planned to cut or move an additional 4,000 jobs in its global drug business. AstraZeneca ($AZN) announced 5,050 job cuts last year, then added another 550 to the toll in February.

Then there's the grand champion of layoffs: Pfizer ($PFE). Its payroll shrank by 51,500 after merging with Wyeth, including a whopping 33,500 job cuts.

- here's the Reuters story

Special Report: The top 10 largest pharma layoffs of 2013 - Boehringer Ingelheim