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Pharmaceutical版 - Get Used to Big Pharma Layoffs: Roche to cut 4,800 jobs
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Three months after the news leaked, Roche has pulled the trigger and
announced plans to cut 4,800 jobs, or 6 percent of its worldwide workforce
of 82,000. In explaining its decision, which was essentially confirmed in
early September (see this), the drugmaker cited a delay in a hoped-for
diabetes med (look here) and an overall need for “adjustments in the
primary care sales organizations.” The move is expected to save about $2.4
billion.
Although Roche did not mention other reasons, the drugmaker has experienced
several setbacks, including a decline in demand for Tamiflu; the unexpected
FDA rejection of its T-DM1 biologic for advanced breast cancer (see this);
an FDA panel that voted to rescind a breast cancer indication for the best-
selling Avastin cancer med (look here) and trials that were suspended for
its ocrelizumab rheumatoid arthritis drug.
In any event, tere’s the breakdown: 2,650 jobs from sales and marketing; 1,
350 from manufacturing; 800 from product development; 600 from research and
early development; 640 from diagnostics and 260 from what is called group
functions, or administration. This adds up to 6,300 positions because 800
jobs will be transferred internally and another 700 will be outsourced to
other companies. Looked at another way, the US will feel the brunt with 3,
550 jobs being eliminated, while 700 - where Roche is based - loses 700 and
the rest of Europe loses 1,300. The remaining 680 are scattered about.
And here are more specifics: technical operations activities will be
reorganized in California, Mannheim, Germany and various other sites,
accounting for 750 jobs being eliminated. Roche also intends to sell sites
in Florence, South Carolina and Boulder, Colorado, affect 600 jobs. About 1,
200 jobs will be cut in the North American commercial operations, mostly in
its primary-care business, while 700 positions will be lost in commercial
operations in Europe. As for R&D, Roche will discontinue activities in
research and early development in RNA interference in Kulmbach, Germany,
Nutley, New Jersey, and Madison, Wisconsin. There are also plans to
reorganize to other functions; all totalled, 600 jobs will go.
In diagnostics, Roche is closing a site in Graz, Austria, and transfering
development and manufacturing work for blood gas diagnostics to Rotkreuz,
Switzerland. In diabetes care, the majority of activities will be based in
Mannheim, Germany, while R&D for insulin pumps will be transferred from
Burgdorf, Switzerland to Mannheim. Manufacturing will be outsourced the
Burgdorf site will be closed. And diagnostics chemical manufacturing and
analytical services will be discontinued in Mannheim and transferred to
Penzberg, Germany
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