Johnson & Johnson Announces it Will Cut 8,200 Jobs
Johnson & Johnson announced today .jpg)
it would eliminate as many as 8,200 jobs, or 7% of its work force, to help the company cope with what it expects will be a slow economic recovery amid damped demand for drugs, medical devices and consumer products. J&J employs about 117, 000 workers globally. While the job cuts will be global, many losing their jobs will be outside of the US.
J & J joins a growing list of pharmaceutical and life sciences companies that have announced new layoffs. Pfizer Inc., the world’s biggest drugmaker, plans to fire 19,000 workers following its acquisition of Wyeth and had already cut 10,000 positions since 2007. J&J began firing as many as 4,400 employees from its pharmaceutical and stent divisions in late 2007. Finally, Merck recently announced that it will be eliminating 16,000 workers after its merger with Schering Plough closes later this year.
J&J’s announcement is more bad news for New Jersey which is still reeling from the earlier loss of tens of thousands of pharmaceutical and life sciences jobs.
Until next time...
Good Luck and Good Job Hunting (forget New Jersey)
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In a previous
The Philadelphia Inquirer reported today that Pennsylvania state legislators, spearheading efforts to retain jobs in the state after the $68 billion Pfizer-Wyeth merger closes next month, said they were fairly confident many positions would remain at Wyeth's regional operations in Collegeville, Great Valley and other sites. Wyeth employs about 4,500 people in the region - about 3,600 in Collegeville and 900 in Great Valley and elsewhere.
The Belgian chemical manufacturer Solvay 
Since 2007, approximately 80,000 pharmaceutical jobs have been eliminated. The recent consolidation in the industry, e.g., Merck-Schering, Pfizer-Wyeth and Roche-Genentech suggests that many more life sciences jobs will be lost over the next year or so. Typically, to avoid law suits and possible discrimination claims, most companies will layoff a mixture of experienced and entry level employees that cover the racial, religious and age spectra. For those of you who may not know, Americans who are 40 and older constitute a “protected class of employees.” In other words, companies that layoff employees cannot disproportionately give pink slips to employees 40 years of age or older. This law was enacted because older employees typically have higher salaries and have accrued more benefits and vacation time than their more junior counterparts and eliminating them can drastically cut costs. While most companies are careful to layoff a mixture of junior and senior employees during large layoffs, a quick perusal of the demographics of employees who lose their jobs reveals that many of them are older, more experienced workers. Sacrificing a few entry level employees (to prevent any red flags) is worth it to the accountants who charged with cutting costs and orchestrating large corporate layoffs..gif)
In the wake of last week’s Pfizer-Wyeth M&A feeding frenzy, I suspect that most analysts were hoping that this week would be a little quieter. Unfortunately for many pharmaceutical company employees, this week may be shaping up to be almost as nerve-wracking as last week!.jpg)
Talk about a rough week. First, on Monday,.jpg)
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The ink hasn’t had time to try on the deal sheet and Pfizer already has announced what the impact of its acquisition of Wyeth will have on the combined company. Here’s what to expect: Pfizer will shed at least 19,000 jobs from it newly combined work force of 128,000 employees; it will slash its stock dividend by 50%; and it will take a $2.3 billion charge to settle a federal investigation over off label promotion of its former pain drug Bextra. .jpg)
I believe in free enterprise and that publicly-traded companies ought to be able to buy one another if a deal makes sense. In any other financial market, Pfizer’s impending acquisition of Wyeth would be a noteworthy event but not extraordinary. However, we are living in unprecedented and uncertain financial times and Pfizer’s possible purchase of Wyeth has serious implications for American taxpayers.
Pfizer's board of directors voted on Sunday evening to acquire Wyeth for $65 billion. While this may help to assuage some of Pfizer's short term financial problems, like the loss of Lipitor in 2011,the deal will not help the combined company in the long run. 
Pfizer is the largest pharmaceutical company in the world. It was able to garner that distinction by going on a decade-long buying spree that began in the mid 1990s. To date, Pfizer has acquired Warner Lambert, Pharmacia and a host of smaller specialty pharmaceutical and biotechnology companies. Despite these acquisitions, which yielded top selling blockbuster drugs like Lipitor and Celebrex, Pfizer’s stock has never performed up to analyst’s expectations. In fact, while it’s smaller and more nimble pharmaceutical competitor’s stock prices were soaring, Pfizer’s stock price was either flat or falling. While conventional wisdoms suggest that “bigger is always better” this has proven not to be the case when companies, like Pfizer, attempt to win greater market share through mergers and acquisition and also loss sight of their core business.
The Pharmalot blog reported today that 
Astra Zeneca announced today that it would cut 1400 jobs and close several manufacturing facilities worldwide. .jpg)
According to the WSJ Health Blog “Wyeth is overhauling its early-stage research by slashing in half the number of therapeutic areas and diseases for which it will pursue new medicines. The idea is to concentrate on more innovative products and get them to market faster.” Whenever large companies restructure or announce reorganization plans, job cuts are soon to follow. So, if you are a Wyeth employee I recommend updating that resume as soon as possible!
The regulatory problems at Wyeth continue. The US Food and Drug Agency 
I want to thank my esteemed colleague, 
According to a post on the Wall Street Journal Health blog, Wyeth announced today that it is laying off about 1,200 marketing and sales representatives who helped support Protonix, its blockbuster heartburn and acid reflux medication. The job cuts are part of a previously announced “asset reallocation plan” that is designed to reduce the size of the company’s workforce by about 5% this year, and by 10% over the next three years. 
to set up manufacturing and research operations in Ireland? In my opinion, the recent Irish pharma and biotech explosion has little to do with luck and everything to do with strategic vision, excellent planning and a well trained, inexpensive workforce.
Things are not going well these days for Wyeth or the US Food and Drug Administration. In the latest of a series of complaints over FDA's safety review of drugs and industry influence on the agency, 
Wyeth announced yesterday
Well, it had to happen sooner or later. 
I am sure that most of you have heard by now that it takes about $1.0 billion to shepherd a new drug from discovery through commercialization. It is a nice round number but methinks that “something is rotten in pharma land”. The massive pharma layoffs in 2007 were justified because of nearing patent expiry, encroachment by generic manufacturers, over zealous FDA scrutiny and failing stock prices. To that end, how do you explain this little tidbit about Wyeth that my colleague Ed Silverman at Pharmalot reported on late last week? 
The .jpg)
The news from Wyeth gets more and more interesting every day. It was 
On Thursday of last week, .jpg)
This morning, 
