Ax falls at Merck as CEO talks sales cuts

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Eight weeks after the completion of Merck's merger with Schering-Plough, the new company is making staff cuts while hinting of more in commercial and manufacturing areas.

Five hundred employees from Schering-Plough's former Kenilworth, NJ, headquarters, now a Merck campus, are set to be let go next month, according to a post on the New Jersey Department of Labor website. It's unclear in which part of the firm these cuts are to occur, though.

Merck CEO Dick Clark yesterday commented on areas where he may authorize reductions. “There is still a lot of duplication, not only in sales force but also in marketing organizations and corporate organizations and issues like that,” said Clark, speaking at a Goldman Sachs conference.

Employers in New Jersey are required by law to provide notice 60 days in advance of plant closings and mass layoffs. Pfizer, another big pharma company in the midst of absorbing a huge company, Wyeth, indicated plans to lay off 400 people by month's end in Monmouth Junction, a town in the center of New Jersey and the site of Wyeth's research headquarters, according to the website.

Both Merck's Kenilworth layoffs and those of Pfizer were first reported by the blog Pharmalot.

Merck has said it expects to eliminate 16,000 jobs as a result of the merger, which became final on Nov. 4, with savings targeted at $3.5 billion. Added to streamlining plans the two companies had already been planning before their union, Merck is shooting for savings of about $6 billion after 2011.

Clark added that the firm will also consider outsourcing some of it sales needs, saying, “you may need flex in the system, particularly with the amount of launches we have planed on a global basis.”

Looking at other parts of the company, post-merger Merck now has 96 manufacturing plants. “I think there's an opportunity there,” Clark said, “just off the top of my head…that we'll be able to consider."
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