Pharmaceuticals manufacturer Merck has announced a further 8,500 job losses, on top of an earlier cut of 7,500 positions. It will also restructure its research and development (R&D), following delays by US regulators in approving new medicines. The company has now reduced its total workforce by 20%.
The cuts aim to achieve savings of US$1bn for Merck in 2014 and US$2.5bn per year thereafter, the company announced. Half of the savings will be achieved in R&D and the remainder in the company’s commercial division, including sales and marketing.
The moves are part of a strategy instigated by Merck’s chief executive officer (CEO), Ken Frazier and R&D chief Roger Perlmutter. The latter joined the company in April to replace Peter Kim, under whom experimental drugs in cardiovascular, surgery, and osteoporosis suffered setbacks while rival drugmakers were able to get new products to market.
“We will sharpen our focus on core therapeutic areas,” Frazier said on a conference call, indicating more resources for vaccines, cancer, diabetes and hospital care. “In other therapeutic areas, we will significantly reduce our resources.”
Commenting on the announcement, Warwick Business School professor John Lyon said that Merck’s restructure followed its peers, including Pfizer, AstraZeneca and GlaxoSmithKline. “There is a huge transformation going on in the pharmaceutical industry,” he commented
“Pharmaceutical companies can no longer rely on the blockbuster model of developing drugs and searching for revenues in excess of US$1m per year, so they need to look at innovative ways of generating new products.
“Clinical scientists have spent many years, decades, investigating new medicines from existing chemical compounds and proteins, but it is becoming more and more difficult simply because there are less to look at as the years go on. There is only a finite number of compounds, so the industry is having to shift its focus.
“I would suggest large pharmaceutical companies like Merck need more of the entrepreneurial mind-set within the corporation and also mirrored in their processes to feed their earnings per share year on year. Large corporations are very process driven, but they need to be more flexible and find new innovative ways of working in terms not only of their mindset, but also embedding that into new processes that work.
“They need to be more nimble, so that ownership and responsibility has moved down the organisation and they are not as hierarchical. But this takes time, it is an on-going process that will take many years – it is like turning an oil tanker.”
The “sad truth” of banking is that many jobs will be automated in the future, Deutsche Bank's chief executive said yesterday. Despite this, a recent survey found that 98% of European workers are optimistic about the changes automation will bring to their workplace.
India's gross domestic product (GDP) growth failed to meet expectations in Q2 as it slumped to 5.7%. However, India's IT industry is thriving. It contributes roughly 10% to the country's GDP and makes up about 25% of exports.
From music festivals to motor racing, events and festivals are an integral part of the move to a cashless society, reports SIX Payment Services.
The US Federal Deposit Insurance Corporation is suing nine European banks for allegedly contributing to the collapse of 39 US banks that had a collective value of more than $440bn (€375.6bn).