Merck & Co. said it is eliminating approximately 500 U.S. sales and other commercial jobs early next year—but will add positions in other operations, including those related to oncology research, in a restructuring the pharma giant said would better position it for future growth.

The pharma giant disclosed the job cuts this month in a notice to Pennsylvania’s Department of Labor & Industry under the Worker Adjustment and Retraining Notification (WARN) Act of 1988, and confirmed the cuts in a statement to GEN and other news outlets.

Merck plans to begin eliminating the positions January 3, 2020, and continue through January 16. The jobs affect employees across the U.S., but for administrative purposes are considered to be based at Merck’s U.S. headquarters at its Upper Gwynedd campus in North Wales, PA. “Approximately 500 people will be affected in select sales and headquarters commercial teams,” Merck stated.

The affected employees can apply to other open positions at Merck—though employees who are not offered a new position “will be offered a comprehensive separation package and will separate from Merck” January 3, the company added.

“These changes are part of ongoing company-wide efforts to sharpen Merck’s focus on innovative research and development that addresses significant unmet medical needs and on our best opportunities for growth,” Merck asserted.

“Growth areas”

“At the same time we are eliminating certain U.S. jobs, we are also adding new U.S. jobs in growth areas, such as oncology, based on changes in our portfolio.”

Merck’s presence in cancer is anchored by its multi-indication blockbuster immunotherapy and top-selling drug Keytruda® (pembrolizumab), which in the first half of 2019 generated $4.903 billion in sales, up 57% from $3.131 billion in January–June 2018. Merck also heightened its presence in cancer in May, when it announced plans to acquire Peloton Therapeutics for up to $2.2 billion.

Merck employs about 12,000 people across Pennsylvania, spokeswoman Pam Eisele told The Morning Call newspaper of Allentown, PA. As a result, the 500 affected jobs account for 4% of the company’s state-based workforce—but less than 2% of the 25,400 people Merck employed in the U.S. as of December 31, 2018, according to its Form 10-K 2018 annual report, filed February 27.

The company finished last year employing approximately 69,000 employees worldwide—but acknowledged that it eliminated approximately 2,160 positions in 2018.

Global restructuring

The Pennsylvania layoffs are not the first job cuts carried out by Merck this year. In an April 30 regulatory filing, Merck disclosed that it approved a global restructuring program “focused primarily on further optimizing the company’s manufacturing and supply network, as well as reducing its global real estate footprint.” Merck estimated that the restructuring would cost it “approximately $800 million to $1.2 billion” in pretax costs over the program’s four-year duration through the end of 2023.

“The company will continue to evaluate its global footprint and overall operating model, which could result in the identification of additional actions over time,” Merck cautioned at the time.

In July, Merck acknowledged it was eliminating 150 jobs in Durham, NC, as part of a decision to end bulk production of the active ingredient varicella used in chickenpox and shingles vaccines, and consolidate such production at a single site in West Point, PA, due to declining market demand.

However, Merck also announced plans to add 425 jobs in North Carolina, of which 391 would be created by building a $650 million, 225,000-square-foot manufacturing facility at its existing campus at the Treyburn Corporate Park in North Durham, in order to facilitate expanded production of Gardasil and Gardasil 9 recombinant human papillomavirus (HPV) vaccine. The company also said it would add 34 jobs through a $30 million expansion of its packaging facility in Wilson County.

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