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The past couple of weeks have been awful for employees at AstraZeneca and GlaxoSmithKline after both companies announced massive worldwide layoffs. Interestingly, the downsizing that has taken place at Bristol-Myers Squibb (BMS) in recent years has escaped notice; mainly because media attention has been focused on the sale of two of its non-pharmaceutical divisions, Convatec and Mead Johnson. The sale of these two divisions brought in roughly $8.0 billion giving BMS one of the largest cash reserves among major pharmaceutical companies.
BMS announced two years ago that is would cut its global work force by 10 percent by 2011. Layoffs and cost cutting measures at BMS have been mainly driven by the impending patent expiry of the blockbuster anti-clotting agent Plavix and several other drugs. Plavix reportedly accounts for a disproportionate amount of the company’s annual sale revenues. Despite its new found largess, the company continues to eliminate jobs and shed employees. To make matters worse, BMS confirmed today (as reported on both Pharmalot and the WSJ Health Blog) that it will eliminate pay raises in 2010 for the people who still have jobs at the company. Luckily, bonuses were not eliminated. But as most people who work at big companies will tell you, bonuses are not guaranteed and discretionary. Check out the 2008 total compensation packages (salary, stock options, stock awards, pension etc).
2008 Total Compensation for BMS Executives
| Name |
Title |
Compensation ($) |
| James Cornelius |
CEO/Chairman of the Board |
25,037,768 |
| Anthony Hooper |
Pharmaceutical Division President |
6,047,495 |
| Elliot Sigal |
Divisional President/CSO/Executive VP |
9,643,489 |
| Lamberto Anderottis |
COO/Executive VP |
10,755,297 |
While I don’t profess to have the credentials to be the CEO of a major pharmaceutical company, it doesn’t make sense to me to freeze the salaries of employees who are already overly anxious about whether or not they will have jobs when the next round of layoffs take place. Isn’t morale already bad enough? Does management think employees will be at the top of their games and willing to work hard if they are constantly worrying whether or not tomorrow may be their last day of work? Of course, naysayers will say that BMS employees should suck it up because they at least have jobs. However, I contend that management ought to invest a portion of the $8.0 billion in its employees rather then use it to buy several more companies to convince Wall Street analysts that BMS is truly a “next generation biopharmaceutical company.” After all, employees are any company’s most valuable asset!
Until next time....
Good Luck and Good Job Hunting!!!!!!!!!
Update-The layoffs and outsourcing has already started to take its toll on productivity and remaining employee spirits. I'm disappointed at the behavior of the highly compensated BMS management to allow the outsourcing ans layoffs of dedicated employees who clearly brought value to continue. The lack of creativity and effort toward saving jobs was overshadowed by efforts toward the outsourcing trap which mgt bought into and a topic which should be further investigated as to allenged savings verse present proposed costs which have never been communicated. It is clear during recent layoffs that the BMS managment provided a strategy to preserve mgt positions opting to take the road easily traveled and save themselves during these trying times.I truly thought we would witness an effort to preserve jobs. I was of course was proven incorrect.