Caraco to slash workforce by 52%

Some 350 Caraco Pharmaceutical workers will bear the brunt of a much-publicized production stoppage. Not only is the company hamstrung from selling its manufactured products--because FDA had its inventory seized--JPMorgan Chase cut off its credit until the regulatory dispute is resolved. So, the U.S. arm of India's Sun Pharma will cut loose more than half of its workforce to save money while it works out its problems with the FDA.

As you know, Caraco last month saw a host of finished products seized because of manufacturing defects, and its active ingredients were put on hold, too. Among the products affected were generic versions of the epilepsy med Tegretol and a copycat form of Glucophage. The company had thought that revenues from its distribution business would cover operating expenses while it negotiated with the FDA, but apparently it didn't work out that way.

"The timing of the resumption of manufacturing operations, in whole or in part, depends on the outcome of discussions with the FDA," the company said in a statement. And it suggested that it might recall some workers, also depending on those discussions. We--and the laid off staffers--will have to wait and see.

- see the Caraco release
- read the news from Dow Jones
- check out the Reuters story

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