You can't talk 2007 in the drug industry without mentioning the L word: layoffs. Everyone who's anyone in pharma these days is doing it. Why? Generic competition and the pipeline troubles, for starters. Pfizer is slashing its payroll by 10,00 jobs due to a one-two blow on Lipitor; already due to go off patent in 2010, the drug already has attracted generic challengers, and Pfizer's hoped-for replacement, trocetrapib, failed a late-stage trial. AstraZeneca announced a total of 7,600 job cuts, about 11 percent of its workforce, blaming the layoffs on upcoming generic competition and falling sales.
Safety issues came into play, too; without the brouhaha over stent safety, for instance, Boston Scientific may not have had to cut 2,300 jobs as announced in XX. Or take Amgen and Johnson & Johnson; sales of their blockbuster anemia drugs have been, well, a bit anemic since questions first arose about their propensity for serious side effects at high doses. This year, they announced cutbacks of 2,600 (Amgen) and 5,000 jobs (J&J). And then there's GlaxoSmithKline and its Avandia problem. Before studies showed the diabetes drug could cause heart failure, heart attack, and stroke in some patients, Avandia was one of the company's top sellers. GSK said in October that it would carve 5,000 jobs off its payroll.
The job cuts, of course, are all part of restructuring plans designed not only to cut costs, but to streamline operations and, in some cases, prune low-performing plants or off-the-subject operations. Novartis' recently announced job cuts--3,750 of them--are part of a company-wide flattening of the org chart, designed to speed up decision-making. Will a more nimble, innovative Big Pharma result? That's a wait-and-see kind of question.
- see our special report on the biggest layoffs of 2007
- read Fortune's take on the record-setting layoffs in Big Pharma