Drugmaker Bristol-Myers Squibb said Tuesday it will eliminate another 10 percent of its work force through 2010 as it works to pare costs before it loses patent protection on key drugs.
CNBC.com
The New York-based company says it will eliminate 800 positions by the end of 2008, including filled and vacant jobs worldwide. Bristol-Myers Squibb estimates it will save $1 billion by 2012 as a result of the moves, which come on top of $1.5 billion in cost cuts announced in December 2007. Those cuts will eliminate about 4,300 jobs through 2010.
The company had about 41,000 employees at the end of 2007. The company said in July that it would announce new cost savings plans by the end of the year.
Bristol-Myers did not provide an estimate of what the job cuts will cost. The company said the moves will allow it to address both short-term and long-term challenges and uncertainties.
The cost reductions are intended to take effect during Bristol-Myers' "patent cliff" period in 2011 to 2013, when key drugs like its blood thinner Plavix, bipolar disorder treatment Abilify and blood pressure drug Avapro are expected to face low-cost generic competition, which will likely lead to falling revenue.
In addition to the job cuts, Bristol-Myers is trying to boost sales and save money by improving inventory management, selling non-essential businesses, getting customers to pay their bills faster and paying its own bills more slowly.
With the patents on some of the world's best-selling drugs set to expire over the next few years, pharmaceutical giants including Wyeth , Merck, GlaxoSmithKline and Pfizer. and others have announced major job reductions and cost cuts as they prepare to lose major sources of revenue.
In October, Merck said it would cut 7,200 jobs by 2011.
In aftermarket trading, Bristol-Myers shares fell to near $22 after closing at $22.50.