Bristol-Myers Squibb ($BMY) had the intent. Now it has the real estate. The New York-based drugmaker last month said it planned to consolidate some operations in the Hillsborough, FL, area. This week it announced it has leased a 70,000-square-foot building in Tampa where it will do just that.
The company will locate there its North American Capability Center, which will become the working home to about 580 people in the next three years. It expects to have 250 people there by the end of the year, according to the Tampa Tribune. But this is not so much an expansion as a way to cut expenses for the New York-based company by moving jobs to a lower-cost area. The plan is to consolidate jobs in information technology, marketing and finance now strung across other operations. Many of the jobs are currently housed at offices near Princeton, NJ. Some workers from there are expected to relocate to Florida.
"The high cost of staffing and operating our facilities in New Jersey has made it difficult to control our expenses, especially as we grow," spokesman Frederick Egenolf told the newspaper. "Moving these positions to Tampa will help us realize significant cost savings for labor and facilities over time, while also reducing demand on our existing facilities in New Jersey by providing additional room for growth."
The company also netted $2.1 million in tax incentives from a couple of local programs to seal the deal and is in line to get another $4.8 million from the state, the Tribune reports. For that largesse, the company pledged to have 579 people at the center by 2017, earning an average of $65,000. BMS told the county officials handing out the tax breaks that the operation will have a $37.6 million payroll and spin off $21.2 million in capital investment.
Tax savings actually figured into BMS' second-quarter earnings report but one that showed some soft trends. Revenues matched expectations, but expectations were low--global revenue dropped 9% to just over $4 billion. It cut its full-year revenue and earnings forecasts. Leerink Swann analyst Seamus Fernandez observed that the "low quality" results depended mostly on a lower-than-expected tax rate. Particularly disappointing were sales of Eliquis, a new anticoagulant drug it shares with Pfizer's ($PFE). Eliquis brought in $12 million for the second quarter--even worse than the $17 million it sold in the first quarter, a number that had already disappointed.
- read the Tampa Tribune story