Major Job Cuts in Big Pharma
I’ve been talking about this for a while and there is finally an AP story outlining all the big pharma job cuts.
Drug Industry Sees Big Job Cuts: Financial News - Yahoo! Finance
Here is a summary:
Johnson and Johnson 4,800
Pfizer 10,000
Merck 7,000
AstraZeneca 7,600
Schering-Plough 1,100
Bristol-Myers Squibb unspecified but likely several thousand
All of these were announced last year accept for Merck and Schering-Plough.
Here is one of the more interesting quotes from this article.
Analyst Steve Brozak of WBB Securities says Wall Street is partly to blame.
By unrealistically demanding the same double-digit profit growth the industry produced through the 1990s, big investors are forcing pharmaceutical companies to scuttle external research partnerships, then reduce head count and other expenses, Brozak said.
“You’re seeing senior VPs … eliminated at these companies,” replaced by junior people with less savvy but half the salary, he said.
While I do agree with the unrealistic demands of Wall Street, I also think that big pharma did not do a good job of explaining to Wall Street the future and are responsible for allowing these unrealistic expectations to continue.
I don’t agree with the part of seeing senior VP’s losing their jobs. I’ve not actually seen that as most of the people I’ve known or heard about are at most middle management but mainly what I refer to as “workers bees” those that actually are doing the work.
And this isn’t going to improve anytime soon. The years 2010 and 2011 are going to be crucial as many blockbuster drugs come off patent including Liptor, Effexor XR, Pavix, and Zyprexa.
The article goes on to say some firms are still seeing demand but I bet if you look into the demand are from small companies and will not offset the large number of layoffs at big pharma.
Also there have been more small companies having trouble getting their drugs approved and some of them are having layoffs too although not to the same scale as the ones above. Overall it is not going to be a good time for the industry for the next five years at least.
Technorati Tags: AstraZeneca, Bristol-Myers Squibb, Johnson & Johnson, layoffs, Merck, Pfizer, job cuts, Schering-Plough
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August 29th, 2007 at 5:32 pm
I think your article is misleading. Its boom-time for Pharma! Both the American chemical society and National Academy of Sciences say there are critical shortages in skilled workers due to the expanding industry. Even the NPA (national postdoctoral assocation) is try to lift the cap on visas to allow in as many foreigners as possible.
If we don’t do something now to address the critical shortage of workers , the USA will be doomed!
August 29th, 2007 at 6:13 pm
Well feel free to disagree but that’s not what I’m hearing from people in the industry that I know. With the number of lay-offs I think the ACS, the Academy and NPA are only looking at the new graduates and not at the market as a whole.
Also, big pharma is in trouble if you ask me with the number of blockbuster drugs coming off patent in the next several years, it wouldn’t surprise me to see even more lay-offs in the next three to four years.
Many times I’ve heard associations say the sky is falling and there are going to be great shortages and I have not yet seen that come true. I’ll trust my own expierence and that of others I trust in the industry.