You read it here first. As part of a reorganization already under way, the drugmaker is eliminating 1,000 sales jobs - or 20 percent of its sales force - by October. Many of the 4,000 or so surviving reps, meanwhile, will be shifted to pitch different types of docs or work in other territories. A Schering-Plough spokesman confirmed the cuts.
The move is being made in response to two very different developments- the recent acquistion of Organon Bioscences and the collapse in Vytorin and Zetia scrips. Last April, ceo Fred Hassan trumpeted plans to cut 10 percent of the drugmaker’s workforce of 55,000 in order to save up to $1.5 billion by 2012, although most of the cuts are expected to occur by 2010.
The cutbacks include consolidating management; using more shared staff support and services; reducing travel; cutting sales and marketing; slashing R&D; consolidating product lines, particularly in the animal health unit; and closing some of the 60 manufacturing plants. Numerous jobs were already eliminated in recent months. About 60 animal health sales reps are also being axed today, for instance.
Schering-Plough joins several other large drugmakers this year in eliminating a large number of sales reps. Others include Merck, Wyeth and Sanofi-Aventis.
10 Comments
They've not yet hit bottom....
Shearlings Got Plowed has some great posts.
You're far too kind, Jack. . .
And Ed S. is absolutely right -- CafePharma has been buzzing about these cuts for a couple weeks -- and it seems the actual day is finally here. My condolences to the families affected by CEO Hassan's (and his Top Six's) greed.
The saddest part is that many of these layoffs were likely avoidable, and Schering might be positioned to sell other drugs, today -- had the management team faced reality (however ugly that reality might have been) a little sooner.
I dunno -- like. . . . at least 20 months sooner.
This is probably only the beginning. It appears that much more trouble is coming their way. If the BOD doesn't oust the top management team, then it will no doubt get a lot worse. I think they're clueless!
Now everyone is getting to see firsthand the expertise of "Teflon Fred" and the stellar team at the helm of SGP. Look at the "value creation" generated by this team. The SGP share price hovers barely above the point when Teflon Fred took over the company with his McKinsey-created 5 point plan. In the meantime, shareholder dilution has grown by >30%, debt on the balance sheet has exploded, and thousands of jobs have been slashed. Where are the "puff pieces" starring Fred Hassan in the Star-Ledger now? Why are Fred Hassan and Carrie Cox so quiet now?
Disgusting! Terrible management! You can put lipstick on this herd of pigs and they're still pigs! Corporate pigs at the trough, slopping up all the cash they can! Personal greed runs wild in Big Pharma in America and SP leads the pack. I truly hope the feds pen up the pigs!
SP 2
I'm not a swine and I don't wear lipstick. As for CC, she does wear lipstick, but I don't think she's a swine.
No doubt you're upset because of the "tough decisions" I've had to make recently. I had to cut about 1000 sales jobs in order to keep much more money for myself, CC, and the rest of my elite team. By cutting 1000 @ $100,000 per cut plus benefits, I can save a couple hundred million that can be added to our bonus pot! This is what power lets you do. You should try much harder to move up the ladder so you can have these perks. I made over $30,000,000 by myself in 2007 and my team was able to take home another few hundred million. It's good to be king!
You'll find another job. Best of Luck in your search. Sucker!!
FH
SP 2
I want to echo FH. You're being much too hard on the top management team of SP. They have their bills to pay just like you. Blaming us for these problems is like trying to pin the blame for the financial crisis on the top management teams of BS, LB, AIG, WM, etc. It's just not right. As we are in the top 1-2% of wage earners, we drive the economy. What would happen if the demand for multimillion dollar houses went away? We have our lifestyles to think about. As for you, good luck finding another job. Unlike us, you're not entitled. It's good to be Queen!
CC
Don't forget Dr. Koestler -- apparently Hans Becherer, as chirman of the Schering-Plough Compensation Committee of the Board of Directors, has -- ON THE VERY DAY of the "1,000 heads-cut" press release(!) -- given Dr. Koestler a special (non-scheduled) 16 percent raise -- $864,000 per-year now, BEFORE bonus, options, SARs, or long term incentives.
I guess that is the modern currency converter output for "30 peices of silver". . . . more here, in an update:
http://shearlingsplowed.blogspot.com/2008/09/arent-august-2008-ims-vytorinzetia.html
The link to this site I found interesting and the impression that pharmaceutical representative positions are a....."bloodbath of cutting jobs". Catchy, eye grabbing, emotional, but wrong. Yes, this is 1000 sales positions and every large pharma cut gets all the press, but let's take a look a little further than that and see if pharmaceutical representatives positions are being "cut by every company" With over 100,000 representatives in the United States, over that past year, there has been a total of about a 2-3% total reduction in the nations sales force. Remember, this number had risen from 30,000 representatives just 15 years ago. This is a position, first line sales representative, that is difficult, stressful, lonely and has it's pressures. That stated, a good year for a pharmaceutical company is approximately a 10% turnover, with 13% the norm and 15% no uncommon. But leave out turnover, and look at all the emerging biotech companies, the foreign concerns from China, that rival U.S. large pharma companies. Finally add in all the mid to small pharma companies, which have had growth of between 9-21%. Companies such as Nycomed (one of the worlds largest) don't get much press, then there are the companies such as Novo, who has doubled their salesforce (with plans for another expansion possibly?), then Cubist, Genzyme, Gilead, Valeant, Purdue, Santarus, Sepracor, Shire, Teva Nuero (division of Teva), UCB and many more that have increased their salesforces. Not to mention the Contract Sales Organizations that have risen to the highest level and are no longer the entry level to the industry, but have veterans from many large pharma companies and compensation packages that rival. In the end, the U.S. is down about 2 thousand sales positions in this industry. Are physicians, with the given access, probably being called on by too many representatives from some of the larger companies, with 4 representatives calling on the same doctor? Possibly. I would contend the industry over the last 20 years has over expanded and lost "the valuable sales call" to the "frequent sales call". With the large portfolio's of these muli-merger giants their need is understood from a marketing point, but not by the physician. One every week or two weeks is too much. The smaller, mid and biotech companies have less frequency and actually more time, more quality interactive clinical discussions. The so called "thinning of the heard is necessary", but this is not a blood bath at in these economic times when the total position has lost 2-3% of total jobs in the United States. Large pharmaceutical concerns may be at 10-30%, but FDA approvals and pipelines have always dictated that and 2007 and 2008 have seen the least amount of FDA approvals in years. A reduction is necessary for the health of the position and value that it can bring the physician. But these facts are not correct as of yet. I would contend that reductions of 30% may occur in the next 5 years, but with turnover and new emerging entities as described above, the strong representative will not have much difficulty finding a position and probably a better more rewarding one with less traffic and congestion. CSO's will increase dramatically to handle the swings of product approvals and generic patent losses, but with veterans of the industry, rather than first time entry employee's. Manufacturers will need that flexibility in managing cost, which is more to the tune of $200,000 grand taking in all training and development cost which in the first 18 months may run $170K before the end of the first year.
Don't Panic.
Fred Hassen...he's been working on his golden parachute since the old Sandoz days....then Wyeth....now Schering....."my goal is to make_________(fill in the blank) zee numba one pharmaceutical company in the world"......better bail out with that parachute now....