November 29, 2006
Pfizer to lay off 20% of sales force
In a move many say will have wide repercussions, Pfizer said yesterday it plans to trim its US sales force by 20%.
The company said the layoffs are part of an ongoing cost-cutting strategy.
“This is an important step toward making Pfizer a more agile and effective company," said Jeffrey Kindler, Pfizer’s new CEO, in a statement.
Reductions will begin immediately, based on performance appraisals, and will be completed by the end of the year, a Pfizer spokesperson told MM&M.
The spokesperson added that the layoffs will not be region-specific and that the company will maintain its territory structure. "We'll have a reconfigured sales organization in place by April," she said.
Pfizer fields the largest sales force of any pharma company—around 11,000 including primary care, specialty and management—so a 20% reduction equates to about 2,200. Pfizer stands to save upwards of $450 million annually from the cuts, according to a research report issued yesterday by Prudential Equity Group.
Analysts said Pfizer’s move may portend a broader shift toward leaner sales forces among other companies.
“It seems like it’s the end of an arms race,” Michael Krensavage, an analyst from Raymond James, told The New York Times.
"People emulate Pfizer, and this will give other companies leeway to consider pulling back," Jaideep Bajaj, managing director for sales-consulting firm ZS Associates, told The Wall Street Journal.
Pfizer also announced yesterday it had ended a research collaboration with Akzo unit Organon to develop asenapine, a treatment for schizophrenia and bipolar disorder that analysts had predicted could be a blockbuster. The two announcements came shortly before Pfizer’s Thursday pipeline report for investors.