Novartis ($NVS) strikes back. The company says it has no plans to cut thousands of jobs like its crosstown rival Roche does, despite recent press reports to the contrary. Yes, it's looking to cut costs in manufacturing, marketing, and so on as it retrenches for the expiration of blood-pressure drug Diovan's patent, among other sales pressures. But thousands of layoffs? Not so much.
Last week, Roche announced a restructuring that would claim some 4,800 jobs and dispose of another 1,700 via asset sales or attrition, for a total workforce decline of 6,500. The plan is designed to cut $2.5 billion from the Swiss drugmaker's annual cost structure.
Novartis, meanwhile, gave a strategy update that included plans for shedding costs almost everywhere in the company as a way to bolster investment in R&D. And Sonntag over the weekend quoted unnamed Novartis execs, who said that their company's cost savings would come at the expense of major job cuts.
"I do not know who the company's sources are but we do not plan a program similar to Roche's," Novartis spokesman Eric Althoff told Reuters. To MarketWatch he outlined what Novartis does plan to trim: "In marketing and sales we have continuously looked to decrease the spend as percentage of sales. Other areas we are looking at is procurement as well as our manufacturing footprint." No mention of jobs. But we're wondering how Novartis can manage to save a significant amount of money without significantly cutting its payroll. No doubt we'll find out when the company actually starts shearing away.