Abbott to cut 1,900 jobs amid 'significant headwinds'
Abbott will trim its workforce by approximately 1,900 positions in a restructuring exercise intended to streamline commercial and manufacturing operations. Abbott's US pharmaceutical business will shoulder most of the job cuts, which will happen over the next several years, a company spokesperson said.
On a conference call this morning, Miles White, chairman and CEO at Abbott, blamed healthcare reform, European pricing pressures and a regulatory environment that “says no more than it says yes,” for the new cost-cutting measures, which will happen “primarily in the US,” he said. Scott Stoffel, an Abbott spokesperson, said US marketing and sales jobs are one of the areas that will face cuts.
White said 2010 had been “a challenging year for Abbott,” but tempered that assessment with sales figures; Abbott's worldwide sales increased by 13.4% – to $9.97 billion – and worldwide pharmaceutical sales increased by 22.5%, marking a “strong financial performance,” White said. Humira, the company's top-selling product, had sales of $2.9 billion in the US, a 14% increase over 2009 US sales, according to the earnings report.
Company executives on the call said they expect to see continued growth in 2011; the company's acquisition of Solvay Pharmaceuticals, which closed in February of 2010, is expected to generate around 3% of the company's total projected growth in 2011, said Thomas Freyman, EVP, finance and CFO. White repeatedly cited healthcare reform, and specifically Abbott's role in helping to close the Medicare Part D donut hole, as reasons for belt-tightening. “Things like healthcare reform don't come without consequences, if you're a business,” he said on the call.
Abbott announced that it would cut 3,000 jobs last September, as a result of overlaps related to its acquisition of Solvay, and the US pharmaceutical restructuring and layoffs are in addition to those cuts, which happened mostly outside of the US, White said on the conference call. The company laid of 175 sales reps in the US last April.