Genzyme offered some new details about its cost-cutting plans, which include 1,000 layoffs over the next 15 months. But the details are still sketchy because the company is in the early stages of evaluating just where the cuts will come. One thing appears likely: the first layoffs will be in the office, with the second wave coming from production.
Speaking at the Stifel Nicolaus conference in Boston yesterday, COO David Meeker addressed the cost-cutting plan. "There's more than enough to do on both the commercial side as well as the organizational side in the back room, we can fix that chunk first," Meeker said, according to the Boston Business Journal. "So I think as far as how we sort of bifurcate the business, the manufacturing quality will be, I would say in the second phase."
Spokesman Bo Piela outlined a variety of cost-saving strategies, saying that most of the staffing decisions won't be made until next year. He wouldn't specify a dollar figure for cost savings, but did say that job cuts will account for about half. The rest will come from reducing high-cost line items like travel, he told Reuters, and spending money more efficiently. "Reducing our operating costs will allow us to operate in a more cost-effective way and become more profitable, and it creates capacity for us to invest in critical areas," Piela says.
Genzyme has plenty going on right now: it's still working out kinks in its manufacturing process in the wake of a plant shutdown and FDA consent decree. It's ramping up production of its drugs, which have run short during the production crisis. It's selling off divisions, including its genetics unit, which LabCorp is picking up for almost $1 billion. And, of course, it's facing a buyout bid from French drugmaker Sanofi-Aventis.