Wall Street analysts expect Bristol-Myers Squibb (BMS) to announce it will cut its work force by 10%, or 4,300 jobs, and potentially close up to half of its manufacturing plants, at its Dec. 5 investor meeting.
BMS spokesman Jeffrey Macdonald told Bloomberg news that some employees, at some sites, were being notified they would be losing their jobs, as early as last week.
The size of BMS' work force has remained at about 43,000 since 2004, according to its annual reports. Since then, several other large pharmas have cut jobs and costs significantly.
"The business is changing pretty rapidly and the cost structure out of the industry is out of sync," Deutsche Bank analyst Barbara Ryan told the Wall Street Journal. "You have a pretty violent loss of earnings from patent expirations and therefore an inherent cyclicality to the earnings. The industry needs to find ways to be more efficient and also to make its cost structure more flexible."
Ryan said she believes the size of BMS' work force reduction will be about 10% with a good portion of those affected by the cuts being in manufacturing.
Whether BMS' cost-cutting moves make it more attractive as a takeover candidate, remains to be seen, The Journal reports.
Ryan said she believes a takeover of BMS is “pretty unlikely,” partly because rumored buyer, Sanofi-Aventis, doesn't have a strong stock price to help fund such a deal.
Dow Jones Newswires reported Wednesday that a financial source close to the matter said BMS isn't interested in a merger with Sanofi-Aventis and prefers to grow independently.