Issue Date: October 26, 2009
Following approvals from U.S. regulatory authorities, Pfizer has completed its acquisition of Wyeth. Industry observers are now turning their attention to where the new company will make the cost-saving cuts it has promised.
When announcing the $68 billion deal in February, Pfizer said it would lay off 15% of the combined companies’ workforce of about 128,000 people to yield $4 billion in savings by 2012. That reduction includes the roughly 8,000 jobs that Pfizer had already planned to trim by 2011. Pfizer has made more than half of those cuts: At the end of the third quarter, Pfizer had 75,400 employees, down from 81,900 at the end of 2008.
Facilities are also on the chopping block. Wyeth’s Madison, N.J., headquarters is safe, but a Wyeth site in Bridgewater, N.J., focused on manufacturing technology will be closed. Its employees could be shifted to another facility, says Pfizer spokeswoman Joan Campion.
Wyeth’s Great Valley, Pa., site, which primarily houses corporate activities, will also be shuttered. Much of its staff of 900 is expected to be consolidated into Wyeth’s Collegeville, Pa., location.
Research labs could be next to go. Deutsche Bank stock analyst Barbara Ryan expects Pfizer to trim the companies’ combined R&D budget to about $8 billion from the roughly $10.6 billion being spent this year. The big difference between this merger and earlier drug industry deals “is that R&D will likely now get slashed” along with sales and administrative functions, Ryan says.
- Chemical & Engineering News
- ISSN 0009-2347
- Copyright © American Chemical Society