As anticipated, Roche has announced massive worldwide jobs cuts across all areas of its business. The Swiss drugmaker said it would cut 4,800 jobs--or about 6 percent of its worldwide workforce--over the next two years. Additionally, the company plans transfers about 800 jobs internally and 700 positions to third parties, bringing the total number of affected jobs to 6,300. Sales and marketing and manufacturing jobs will be hit the hardest.
Citing the delay of its experimental diabetes medicine taspoglutide, Roche will cut 2,650 positions in sales and marketing. The once highly-touted diabetes drug prospect was put through the ringer when Roche said that it needed to amend trials to watch for side effects like vomiting and nausea, delaying any app for up to 18 months. About 800 product development jobs will be cut or transferred. And Roche is reorganizing some of its manufacturing capabilities in California, US, in Mannheim, Germany and various other sites, resulting in the loss of 750 positions. The Swiss company plans to sell sites in Florence, SC and Boulder, CO--sites that currently employ 600 people.
On the R&D side of the business, Roche is abandoning early-stage RNA interference research in Kulmbach, Germany, Nutley, NJ and Madison, WI. In addition, plans also include reorganizing certain internal functions to free up resources for upcoming Phase II studies of new molecular entities. Approximately 600 positions will be affected. It's also consolidating three sites in its Diagnostic division.
Roche says the restructuring will save about $2.7 billion 2010 through 2012, with projected savings of $2.4 billion after 2012.
"This is a comprehensive, focused initiative to reinforce Roche's long-term innovation capability in the face of increased price pressures and a more challenging market environment. We will continue to drive our highly promising product pipeline to help seriously ill patients and contribute to more efficient healthcare systems," Roche CEO Severin Schwan (photo) said in a statement. "These measures are necessary to ensure sustained success of the company. We will make every effort to find socially responsible solutions for the employees affected."
- here's Roche's release for more