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Schering-Plough said Friday it will cut 1,000 sales jobs as part of broader cuts in a move to reduce costs and reposition itself in an ever-changing industry.
The Kenilworth, N.J.-based pharmaceutical company [SGP
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] said it will cut 20 percent of its U.S. sales force, leaving 4,000 positions. The layoffs are part of a 10 percent reduction in staff announced in April. In all, the company hopes cost cuts and layoffs since the buyout of biotechnology company Organon Biosciences in November will save it $1.5 billion annually by 2012.
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CNBC.com |
The buyout of Organon, for $14.4 billion, fits into the larger pharmaceutical industry trend toward a shift to biotechnology-based products. Many of the largest players in the sector have either been buying biotech companies or creating their own biotech units to help fill depleted pipelines and position themselves for future blockbuster products.
Also, Schering-Plough has been under pressure since it released study results in April showing the cholesterol drug Vytorin is no more effective at preventing the buildup of artery-clogging plaque than generic Zocor, which costs about one-third as much. Vytorin combines Schering-Plough's Zetia and partner Merck's [MRK
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] Zocor.
The companies did not release those findings until nearly two years after that study ended, triggering wide-ranging investigations by two congressional committees amid suspicions the data was withheld to protect sales of the two drugs, which reached $5.2 billion in 2007.
"Schering-Plough is changing the organizational structure of its U.S. primary care sales team in order to capture greater efficiencies and better position the field force to meet the needs of customers," Schering-Plough said in a statement.
The new U.S. selling model will take a new, customer-centered approach, the company said, better positioning its representatives to meet customer needs.
The company is offering severance and other benefits to workers losing their jobs. Those include a cash payment based on their job and length of service, along with outplacement services, and continuation of medical, dental and life insurance coverage at active employee rates for a certain period.
Shares of Schering-Plough gained almost 1 percent to finish at $18.58 Friday.
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