Merck & Co. (MRK), the second-biggest U.S. drugmaker by sales, will fire 8,500 workers and revamp its research and development after seeing new medicines delayed by U.S. regulators.
The positions eliminated are in addition to 7,500 job cuts Merck had already announced, theWhitehouse Station, New Jersey -based company said in a statement today. The firings now equal about 20 percent of the global workforce, and will cut across the entirety of Merck, including R&D, sales and management.
The 8,500 jobs to be eliminated are in addition to the 7,500 positions Merck has already announced, the Whitehouse Station, New Jersey-based company said in a statement today. Photographer: Hannelore Foerster/Bloomberg
The overhaul, to save $1 billion next year, is part of a strategy being set by Chief Executive Officer Ken Frazier and R&D chief Roger Perlmutter, hired in April to replace Peter Kim. Under Kim, experimental drugs in cardiovascular, surgery, and osteoporosis suffered setbacks while rival drugmakers were able to get new products to market.
“While these actions are essential to ensure that Merck can continue to fulfill its mission into the future, they are nevertheless difficult decisions,” Frazier said in the statement.
The company said it will place more emphasis on developing drugs with the most sales potential, as well as putting more focus on the world’s biggest economies, including the U.S., Europe, China, Japan, Brazil and Russia.
Merck rose 1.3 percent to $48.24 at 8:01 a.m. New York time. The stock had gained 5.3 percent in the last 12 months through yesterday, compared with a 18 percent gain in the Standard & Poor’s 500 Pharmaceuticals Index of drugmakers.
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