Hundreds of Novartis sales reps will soon join their rivals in the unemployment line. The layoffs come as the Swiss drugmaker reports a 69 percent drop in third-quarter income--largely off of unusual expenses this year and unusual profit-boosters in 2007--and announces a shuffle in top management.
Some 550 U.S. sales positions face the axe, and those that remain will be divided among five regional units. It's a "new model" specifically for U.S. sales, and Novartis hopes that the regional realignment will help reps meet "the diverse needs of multiple customers." The company also thinks the changes will make sales more efficient; hence the need for fewer reps. More than half the jobs cut will be already vacant positions, so fewer than 300 working reps will be laid off.
Meanwhile, Novartis extended CEO Daniel Vasella's (photo) contract, and he tapped his vaccines and diagnostics chief, Joerg Reinhardt (photo), to be COO. Andrin Oswald (photo), chief of the recently acquired Speedel, will now take the helm at vaccines and diagnostics. George Gunn, who's been in charge of the animal health unit, takes over as head of consumer health for Thomas Ebeling, who's leaving. And Andreas Rummelt (photo), now Sandoz chief, will take a new position as head of quality assurance and technical ops; Jeff George will take over at Sandoz.
As for third-quarter numbers, net dropped to $2.1 billion from $6.9 billion, but sales leapt by 12 percent to $10.75 billion. And within those sales numbers lie some encouraging pharma increases, including a 20 percent hike in cardiovascular sales to $1.7 billion, led by Diovan. Cancer therapy Gleevec grew by 15 percent to $950 million, and vaccines and diagnostics expanded revenues by 16 percent.