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Jul 15, 2013

Top 15 Job-Cutting Companies of 2013 (So Far)

Find out which companies have a long butcher’s bill for the first half of this year.

Top 15 Job-Cutting Companies of 2013 (So Far)

Which companies have been wielding the biggest axe so far this year? [© Marc Scott-Parkin - Fotolia.com]

  • You've seen GEN's list of the top 10 biopharma layoffs of 2012; now, following is a list of 15 biotech and pharmaceutical companies ranked by the number of layoffs they disclosed during the first half of 2013. Each company is listed with its number of job layoffs disclosed in 2013; details on the layoffs where known, such as how many people were affected in which operations, located where; when the layoffs were announced and will take effect, again where furnished; the justification for the layoffs furnished by the companies; and layoff-related charges against earnings and/or projected annual savings from the job cuts.

    Some of the highest numbers of job cuts disclosed in 2013 were sales positions, which pushed the layoff numbers into four figures at Eli Lilly; and manufacturing positions (Novartis, Baxter, Impax, and to a lesser extent Pfizer)—though R&D jobs also continued to be sliced in 2013 as biopharmas opted for cheaper outside collaborations over costly internal R&D operations.

  • #15. Zogenix

    Number of job layoffs announced: 55 jobs

    Details: 37% of workforce eliminated across all functional areas, the company said June 5, leaving it with 93 full-time equivalent employees, including 57 in sales and marketing positions.

    Why the company did it: Job cuts were among cost-reduction measures that included in part unspecified cost control initiatives to further reduce operating expenses and capital expenditures. The developer of drugs for CNS disorders and pain cited a need to conserve cash following slower-than-expected FDA review on its NDA for hydrocodone bitartrate extended release (Zohydro ER) capsules, an acetaminophen-free formulation of the opioid painkiller. FDA delay followed 11–2 vote (one member abstained) on December 7 by the agency’s Anesthetic and Analgesic Drug Advisory Committee, which recommended against approving Zohydro, citing its potential for drug abuse.

    Layoff-related charges/projected savings: Company said it plans a one-time charge of approximately $1 million in the second quarter toward “most” of its workforce-reduction expense through 2013, according to a June 5 statement that noted the company as of that date had not raised any capital through its $25 million at-the-market ("ATM") facility.

  • #14. Mylan

    Number of job layoffs announced: 117 jobs1,2

    Details: Jobs were eliminated from the company’s administrative office for its Mylan Specialty unit in Basking Ridge NJ, the company disclosed to New Jersey state officials. Details about operations affected and numbers of jobs in each operation are unavailable.

    Why the company did it: Restructuring and consolidation of operations to be closer to the company’s headquarters in the Pittsburgh suburb of Canonsburg, PA, where Mylan relocated its headquarters in April.

    Layoff-related charges/projected savings: The company has not disclosed projected costs or savings from the Basking Ridge layoffs. During the first quarter, the company disclosed it spent $79 million on “restructuring and other special items,” nearly triple the $28.2 million spent during Q1 2012.

  • #13. Pfizer

    Number of job layoffs announced: 124 jobs

    Details: All 80 professionals based at CovX Research Unit in San Diego, which the company disclosed plans to shut down in February.3 Pfizer also submitted two WARN Act notices to New York state officials in which it disclosed plans to eliminate 34 jobs at its plant in Pearl River, NY, between December 28, 2012, and June 28 (March 26); and 10 jobs in upstate Rouses Point, NY, between June 30 and December 31 (March 1).

    Why the company did it: San Diego layoffs reflect what the company says is a restructuring of R&D spending, and come more than four years after the company bought CovX and combined it with other units in the short-lived Biotherapeutic and Bioinnovation Center based in San Francisco. Pearl River layoffs part of a total 1,250 jobs the company said in 2010 it would eliminate by 2014. Rouses Point layoffs are part of plans first announced in 2009 and confirmed May 3 by Pfizer to The Press-Republican of Plattsburgh, NY, to shut that plant by the end of this year.

    Layoff-related charges/projected savings: The company has not disclosed projected costs or savings from the specific layoffs.

  • #12. AbbVie

    Number of job layoffs announced: 125 jobs4

    Details: 96 positions to be eliminated between June 21 and December 31, according to a WARN Act notice with Illinois’ Department of Commerce and Economic Opportunity on May 30.5 The company also reported an additional 29 layoffs in a second WARN Act notice on June 26, comprising the U.S. sales force for the lipid franchise, due to loss of patent exclusivity.

    Why the company did it: Restructuring of operations following spinout from Abbott, which took effect January 2.

    Layoff-related charges/projected savings: The company has not disclosed projected costs or savings from the layoffs. Company did disclose that in the first quarter, it shelled out $9 million for employee severance and contractual obligations—$7 million classified in cost of products sold and $2 million as SG&A expenses—toward past layoffs and restructurings.

  • #11. Alkermes

    Number of job layoffs announced: Up to 130 jobs

    Details: About one-third of the workforce to be eliminated at plant in Athlone, Ireland, over two years, the company said April 9. The company acquired the plant as part of its $960 million acquisition of Elan’s Drug Technology unit in 2011.

    Why the company did it: Part of cutbacks that included ending production of several undisclosed older drugs accounting for a combined 5% of sales—products the company deemed “uneconomic” due to shrinking demand stemming from greater competition from generic drugs.

    Layoff-related charges/projected savings: Restructuring charge of $12.5 million in the first quarter to cover severance and other employee-related expenses, plus noncash charges of $10 million in 2014 and $7 million in 2015, intended to reflect accelerated depreciation associated with the plant’s manufacturing operations. The layoffs and other cutbacks are projected to generate annual savings of between $15 million and $20 million by 2016.

  • #10. Aveo Oncology

    Number of job layoffs announced: 140 jobs

    Details: Cancer drug developer eliminating about 62% of its staff across all company functions, including clinical and regulatory operations, and business-development operations.

    Why the company did it: Response to FDA signaling it would follow its Oncologic Drugs Advisory Committee, which on May 1 voted 13–1 to recommend the agency reject tivozanib for renal cell carcinoma (RCC). Following ODAC’s vote, Astellas Pharma pulled financial support for future trials of tivozanib in RCC, and backed off earlier plans to file an application for marketing authorization in Europe. But Astellas remains a partner with Aveo in the upcoming BATON Phase II clinical trials of tivozanib in triple negative breast cancer and metastatic colorectal cancer. Aveo expects to announce results from the colorectal cancer trial next year, and from the breast cancer trial in late 2014 or early 2015.

    Layoff-related charges/projected savings: Restructuring projected to save it $190 million over two years, including $7.5 million to $8.5 million the company will shell out in personnel-related charges.

  • #9. Impax Laboratories

    Number of job layoffs announced: 143 jobs6

    Details: About 10% of workforce to be cut by August 4, mostly manufacturing jobs at its Hayward, CA, plant, as well as 20 jobs from its contract sales force and four sales management positions.

    Why the company did it: Workforce cut part of a streamlining of operations “in response to the need to reduce expenses and adapt to changing market conditions,” and is projected to save $10 million this year, the company announced June 5. Company cited a drop in production volume at the Hayward plant after it shifted products to its more cost-efficient Taiwan plant, as well as previously decisions to discontinue products and delay launches. The sales job cuts were blamed on FDA’s delay in approving the Parkinson’s disease drug candidate Rytary, and were projected to cut sales expenses by about $2 million this year. Impax has struggled with manufacturing problems at its Hayward plant that resulted in the delay, followed by the end of a partnership with GlaxoSmithKline.

    Layoff-related charges/projected savings: The company is expected to take a charge of about $2.4 million in the second quarter.

  • #8. Roche

    Number of job layoffs announced: 170 jobs

    Details: Company’s 454 Life Sciences subsidiary began eliminating about 110 jobs in Penzberg, Germany and 60 in the U.S., in Branford, CT, on April 23. Branford layoffs represent about one-third of the site’s total workforce.

    Why the company did it: Elimination of company’s applied sciences business area within its diagnostic division, announced April 23 and set to take effect at year’s end. The company has cited pricing pressure on new drugs as well as funding cutbacks in life-sci research, including federal across-the-board budget cuts or sequestration. Roche will shift its polymerase chain reaction technology and nucleic acid product lines business to its Molecular Diagnostics business area, while custom biotechnology will move into the Professional Diagnostics business, and a new sequencing unit will be created.

    Layoff-related charges/projected savings: The company said its financial outlook for 2013 remained unchanged, but has not disclosed projected costs or savings from the elimination of applied sciences, saying its financial reporting will reflect its new business structure when it publishes its 2013 half-year results later this year. Last year, company said it spent CHF 180 million ($190 million) related to employee termination and site closure costs associated with cutbacks in the applied sciences business.7


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