Perhaps the most persistent trend in the drug business is one management would prefer to discuss only with analysts, and certainly not with the rank-and-file. Once again, a laundry list of pharma companies are laying off workers by the thousands. Companies large and not-so-large are shrinking their workforces, from Merck ($MRK), which in May announced plans to cut up to 13,000 jobs, to Sunovion, whose 250-plus job cuts hit the news this week.
Before Merck revealed its latest cost-cutting plans, it looked as if 2011 might be a relatively blood-free year. And it's true the numbers don't approach the layoffs announced in 2009, when Pfizer ($PFE) merged with Wyeth and Merck with Schering-Plough--and both mega-mergers resulted in mega-job cuts.
But after Merck came Abbott Laboratories ($ABT), which said it would eliminate 1,900 positions, half of them immediately. Novartis ($NVS) disclosed plans to trim 2,000 jobs, including more than 1,000 in Switzerland, touching off street protests and a one-day work stoppage at a plant slated for cuts. Pfizer said it would be slimming down its Lipitor sales force by an undisclosed number, as well as cutting 220 jobs in Spain and 500 in Germany. AstraZeneca ($AZN) said it would shed 1,150 jobs in its U.S. sales operations.
A couple of mergers triggered layoff talk: Sanofi's ($SNY) buyout of Genzyme and Teva Pharmaceutical Industries' ($TEVA) Cephalon acquisition. After the Sanofi-Genzyme deal closed, company officials acknowledged jobs would go, but didn't say how many; since then, Sanofi has warned employees in sales and R&D to expect "hundreds" of job cuts as part of a plan to squeeze $2.9 billion out of its annual costs. Likewise, Teva is said to be preparing for layoffs as it absorbs Cephalon. Reports range from 1,000 to 1,500 positions slated for the axe, but the company hasn't made an official announcement.
And then there were the smaller layoffs. GlaxoSmithKline ($GSK) said it would cut 130 jobs at two Irish plants. Baxter ($BAX) closed a Canadian plant that employed 135. Dendreon's ($DNDN) unexpectedly slow Provenge rollout claimed 500 jobs. Bayer's plans to move some production to Germany from California put 540 positions on the chopping block. Amgen ($AMGN) said it would cut 380 R&D jobs. And so on.
The "good" news? Fewer layoffs are expected as time wears on. So many have been laid off in recent years that there's little left to cut, experts say. And then there's the emerging markets story: Big Pharma is still hiring in China and India.