Based: Whitehouse Station, NJ
Announced layoffs: 8,500
When it comes to pharma layoffs, Merck ($MRK) is a repeat chart-topper. After leading the layoffs list in 2011 with announced cuts of 12,000 to 13,000, Merck once again claimed the No. 1 spot this year with the news that it would shed 8,500 positions from its R&D and commercial operations. The R&D cuts come not long after Merck brought on new research chief Roger Perlmutter, who previously held the post at Amgen ($AMGN).
|Merck research chief Roger Perlmutter|
The layoffs are part of a larger makeover at Merck--specifically, a $2.5 billion global restructuring. Amid the change-up, the company will move its home from Whitehouse Station, NJ, to nearby Kenilworth, instead of to neighbor Summit as previously announced. Merck will shutter both the Summit and Whitehouse Station headquarters.
The patent cliff and subsequent generic competition have been chiefly responsible for the layoff spree. Last year, generic rivals descended on best-selling Singulair, for one, taking sales down by 90%. But pipeline missteps have also played a role and prevented the company from regaining its financial footing. Sleep drug suvorexant and anesthesia treatment sugammadex fall among Merck's recent disappointments.
In light of those issues, analysts had been calling for a restructuring; one urged Merck to shed at least $1 billion in costs. The company apparently agreed: It has said it expects that much in overall savings to kick in by the end of this year.
Merck says that because of overlapping restructuring plans, 7,500 of the 8,500 layoffs in this wave--the fourth major round since 2008--have been previously announced. Still, those rounds together amount to nearly 40,000 jobs. By the time the restructuring is carried out, Merck's workforce of 81,000 will be 20% slimmer. -- Carly Helfand (email | Twitter)
Special Reports: Top 10 Pharma Layoffs of 2011 - Merck | Top 10 Pharma Layoffs of 2009 - Merck | Top 10 Pharma Companies by Employees - Merck
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