One long-anticipated ax has fallen: Pfizer plans to shut down production at eight manufacturing plants by 2015 and scale back operations at six others, cutting about 6,000 jobs in the process.
The moves stem from Pfizer's megamerger with Wyeth, which added more than three dozen facilities to Pfizer's 40 manufacturing sites. No way would the combined company need so many plants, one Pfizer executive told Reuters. "We have a complex network of manufacturing plants," said President of Manufacturing Nat Ricciardi, "with excess capacity that is not good for costs."
Streamlining the combined Wyeth-Pfizer operations--and the cost cuts that streamlining can provide--is a key reason the two companies merged in the first place. At the time the merger was announced, executives predicted job cuts of almost 20,000 across the combined company.
Ricciardi said that the manufacturing cuts don't disproportionately affect ex-Wyeth operations, but include many pre-merger Pfizer plants and workers. The eight plants slated for shutdown are in Ireland, Puerto Rico and the U.S.; among them are facilities in Caguas, PR; Loughberg, Ireland; and Rouses Point, NY. The other six plants--where production will be reduced--are in Ireland, Puerto Rico, the U.S., the UK and Germany. A wide variety of products are made at these sites, everything from consumer healthcare products to biotech drugs.
Of course, the cuts will require Pfizer to shuffle operations, transferring some manufacturing to other plants. The entire process is expected to take up to five years in some spots. The company hopes to be able to sell off some plants to owners that would keep them operating. We'll keep you posted.
- see the release from Pfizer
- read the Reuters news