Pfizer Announces Big Reorganization, Job Cuts

Pfizer Chief Executive Officer Jeffrey B. Kindler detailed a thorough restructuring plan this week that includes the elimination of 10,000 jobs and the closure of manufacturing and research facilities around the world. These moves target annual after-tax cost savings of $1.5 billion to $2 billion by the end of 2008, he said.

Kindler, who became CEO last August, outlined a plan to create smaller, more entrepreneurial business units and consolidated research teams. He said the company will step up its program to access external drug candidates, claiming that Pfizer plans to launch two new externally sourced products each year beginning in 2010.

The job cuts, which include the elimination of 2,200 U.S. sales jobs announced last month (C&EN, Dec. 4, 2006, page 14), represent a 10% reduction in Pfizer's worldwide workforce by the end of next year. Kindler has proposed a 20% reduction in Pfizer's European marketing field staff.

Pfizer will close manufacturing sites in Brooklyn, N.Y., and Omaha, Neb., and is in labor negotiations over the proposed sale of its Feucht, Germany, site. The company is planning to close three U.S. research sites, all in Michigan—two in Ann Arbor and one in Kalamazoo, where it will maintain manufacturing for its animal health business. Pfizer is negotiating the closure of research centers in Nagoya, Japan, and Amboise, France.

As part of the reorganization, Kindler said, Pfizer will step up research efforts in vaccines and antibodies. He also announced plans to exit discovery research in gastroenterology and dermatology.

The moves will cut "at least three to four layers of management" across Pfizer's major business units, according to Kindler. "We're getting leaders closer to colleagues and customers and giving colleagues a clearer line of sight to those aspects of the business for which they are accountable," he said.

The primary goal, Kindler said, is to maximize revenue on Pfizer's existing product portfolio and pipeline. "We must reduce our absolute costs and put in place a more flexible cost structure," he said.