Merck CEO Dick Clark spoke a figure, and around the world, people started worrying. That figure was 15 percent--the estimated job cuts attendant on his company's merger with Schering-Plough. With a combined workforce of 106,000, the two companies will together shed about 16,000 workers.
That's not a huge surprise; Clark was quoting billions of dollars in cost savings from the deal, and big mergers often do mean big layoffs. Consider the Pfizer-Wyeth deal, which is also expected to result in a 15 percent job loss, or some 19,500 cuts. But "expected" doesn't mean "easy." So forgive staffers in Ireland and England, in Philadelphia and New Jersey--probably in any location where Merck or Schering has workers--for their pink-slip nightmares.
The good news for Philly folks is that Clark calls the impact there "minimal." That's because there's little if any overlap between the two companies in that area. Not so much in New Jersey, where both companies maintain their headquarters. For instance, in Schering's home base of Kenilworth, local officials and small business owners were stunned by the announcement, because the tax base and commerce there depend on the drugmaker. It's the biggest game in town.
We'll have to wait some months to see just where the layoffs take place. But in the meantime, we expect plenty of résumès to fly out of both companies. Just in case.