Eli Lilly counts up 2,300 early retirements in $500M cost-cutting drive

As Eli Lilly works to reduce its headcount by 3,500 employees, the company reports that 2,300 have taken early retirement packages.

Eli Lilly has a status update for its massive round of job cuts aimed at saving $500 million per year: Around 2,300 employees have taken voluntary early retirements, and Lilly is "on track to achieve" the 3,500 cuts it laid out in September.

Beyond the 2,300 retirements, "the company will determine where it needs to further reduce costs and improve efficiencies," spokesperson Mark Taylor said via email.

"Remaining positions will come from other anticipated workforce reductions, including select site closures ... as well as consolidation of some work to existing shared service centers," he continued. 

The company had previously said it would close research sites in New Jersey and Shanghai, and move animal health manufacturing from a site in Larchwood, Iowa, to an existing site in Fort Dodge, Iowa. 

The moves are new Lilly CEO David Ricks' first major restructuring at a time when Lilly faces competitive pressure on its important diabetes business and looks to a wave of new therapies for growth. Psoriasis entrant Taltz has picked up quickly this year, and the company has high hopes for new breast cancer medication Verzenio, which won approval in late September. 

Before the job cut announcement, Ricks shook up the drugmaker's management team, bringing in former Novartis executive Christi Shaw and naming Enrique Conterno to head of Lilly USA and diabetes chief. 

The company's former U.S. head, Alex Azar, left in the overhaul but is now poised to be named secretary of the U.S. Department of Health and Human Services, according to multiple media reports. 

Lilly's move to reduce its headcount by 3,500 is the company's largest cut since 2009, when it let go of 5,500 employees. Earlier this year, the drugmaker eliminated 485 jobs because of a trial failure for Alzheimer's candidate solanezumab. The company had added staff in anticipation of an approval and launch. 

Other top drugmakers to chop a significant number of jobs this year include Merck & Co., which recently overhauled its sales team with a round of 1,800 cuts and added a new team of 960 staffers to market chronic care medications, and struggling Teva, which downsized with a round of 7,000 eliminations. 

Lilly had about 42,000 employees around the world at the end of last year, according to its annual SEC filing.