Two years after announcing plans to eliminate more than 10,000 jobs, AstraZeneca is reportedly set to shed thousands more when the drugmaker announces earnings later this week, according to a report in The Sunday Times that cited securities analysts. We asked an AstraZeneca spokesman about the report, but he declined to comment on what he called 'market speculation.'
Such a move underscores the difficulty that AstraZeneca braces itself for looming patent expirations on some of its biggest sellers, notably the Crestor cholesterol pill, the Nexium acid reflux med and the Seroquel antipsychotic. In recent weeks, the drugmaker disclosed plans to eliminate 400 jobs in its commercial business and US headquarters, and another 1,150 jobs from the US sales force (see here).
Last month, AstraZeneca US president Rich Fante described those cuts as part of an ongoing ’second phase’ of restructuring that began in January 2010. At the time, the drugmaker indicated plans to reduce its overall headcount by 10,400 jobs (see slide 103 of this slide show), although the most recent round of jobs cuts are on top of that forecast. The next round of cuts would reportedly come on top of earlier layoffs.
Between 2007 and 2009, AstraZeneca eliminated 12,600 positions, a move that saved $1.6 billion annually, although that figure rose to $2.4 billion by 2010. The cuts announced that year were designed to save $1.9 billion annually by 2014 (read here). It is not clear how much the drugmaker hopes to save with still more cuts, but some $3 billion may be spent on a stock buyback to bolster shareholder confidence, according to the Sunday Times.
axe pic thx to brittgow on flickr