Merck will have eliminated 5,100 jobs by the end of the year, 700 more than first planned in 2003, in an effort to cut costs by $2.4 billion over four years, chief executive Raymond Gilmartin said yesterday.
The job cuts would come from throughout the company, a spokesman added, with approximately half coming from the company's manufacturing side.
In October 2003, Merck outlined a restructuring plan calling for the elimination of 4,400 positions. The latest job cuts follow Merck's withdrawal of Vioxx from the market in September. Merck said, with 5,100 jobs phased out, it will be able to save a $300 million in payroll and benefits.
Other planned savings through 2008 include $1.2 billion from procurement changes, $300 million from inventory reduction, $600 million from capital initiatives and other additional savings in manufacturing costs.
During Merck's annual business briefing with analysts Tuesday, Gilmartin said the company has sped up changes to increase its growth, and will stand firm in avoiding major mergers, instead, seeking new drug candidates through licensing deals and internal research.
Additionally, general counsel Kenneth Frazier said Merck will vigorously defend itself against lawsuits surrounding the Vioxx withdrawal by moving state cases to federal courts, having the litigation coordinated by one judge and blocking any class action lawsuits.
Frazier said 475 personal injury lawsuits, covering 1,100 patients, had been filed by Nov. 30.