Pfizer will cut between 18,000 and 19,000 jobs as it absorbs Wyeth, the company said.
Pfizer plans to cut 10% of its pre-merger global workforce of 81,900 and another 15% of the combined headcount after it absorbs Wyeth later this year. Wyeth has around 47,000 employees worldwide. The initial round of cuts will be made over the next two years, said Ray Kerins, VP, worldwide communications at Pfizer. The company has not yet established a timeframe for the second round.
Pfizer said earlier this month that it would eliminate around 800 jobs from its 10,000-strong R&D division. Bloomberg and other news outlets reported last week that the company would lay off 2,400 US reps — about one-third of its US sales force — though Kerins dismissed those reports as “rumor and speculation.” Early last year, Wyeth said it would reduce its global work force by 10%, and the company later said it would eliminate 1,200 US sales positions.
The reductions come as part of Pfizer’s $68 billion acquisition of Wyeth, aimed in part at plugging the $12.7 billion hole that Lipitor’s looming patent expiration will blow in the company’s revenues. Pfizer is also playing catch-up on biologics and vaccines – areas in which well-diversified Wyeth, with products like Enbrel and Prevnar as well as a profitable consumer products division, is a major player. Pfizer is paying $50.1 per share in cash and stock for the Madison, NJ-based company, and expects the deal to close late in the third quarter or early in the fourth quarter.
The combined company will be called Pfizer.
In November 2006, Pfizer announced plans to cut 20% of its sales force, which then stood at 11,000, effectively reversing a decade-long escalation in industry sales forces and triggering similar downsizing by competitors.
Separately, Pfizer reported an eye-popping 90% drop in net income for the fourth quarter of 2008 due to a $2.3 billion settlement with the US Attorney for the District of Massachusetts over alleged off-label promotion of Bextra, “as well as other open investigations.”
Earlier versions of this story, calculated using baseline figures provided by Pfizer, suggested that the number of cuts could be as high as 25,000 or 26,000. It turns out that we incorrectly added the initial round of 8,190 eliminations to the second round of cuts.