Amgen said it is initiating a restructuring plan that will reduce staff by 2,400–2,900, beginning later this year and continuing through 2015, predominantly in the U.S. This represents approximately 12–15% of Amgen's global workforce. The company will also close its facilities in the states of Washington and Colorado.
Amgen officials cite the need to improve the company’s cost structure for the moves it announced. Initial efforts include streamlining the organization, reducing layers of management, increasing managerial spans of responsibility, and beginning implementation of a revised geographic site plan, explained Robert Bradway, chairman and CEO.
“The talented staff members at these locations have made enormous contributions to advancing biotechnology over the years and the surrounding communities have been very supportive, so it is with great reluctance that we acknowledge the need to exit,” said Bradway. “At each site, we are actively engaging in discussions with third-parties about potential future use of the facilities.”
The company will expand its presence in the biotechnology hubs of South San Francisco, CA, and Cambridge, MA, and retain its headquarters in Thousand Oaks, CA, with a reduced number of staff consolidated into fewer of the existing buildings. These actions will result in an approximate 23% reduction in Amgen’s facilities footprint, noted a company spokesperson.
According to the company, these actions will result in pre-tax accounting charges in the range of $775–950 million, primarily incurred in 2014–2015. The combination of these efforts will reduce operating expenses by approximately $700 million in 2016 compared to 2013, although most of the savings will be reinvested to support global launches of new products.
Amgen is also evaluating additional efficiency initiatives, particularly in the area of shared services and other external expense categories to support its growth objectives.