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February 24, 2014

Top 10 Job-Cutting Companies of 2013

Find out which firms put the most employees on the chopping block last year.

Top 10 Job-Cutting Companies of 2013

Plans to eliminate a total of more than 28,000 jobs were disclosed last year. [© jwblinn - Fotolia.com]

  • Biopharma companies needed a bit more effort to make this year’s list of top 10 job cutters compared with a year ago—nearly 50% more effort.

    This year’s top 10 disclosed plans to eliminate a total of more than 28,000 jobs in 2013, up nearly 50% from the 18,910 jobs eliminated by the top 10 job cutters of 2012. Big pharma continues to slash their workforces—especially in high-paying positions—from research to administrative, and from manufacturing to sales.

    Some of the cuts reflect responses to patent-cliff losses as protection expires for blockbusters. Other layoffs reflect the usual pruning of duplicate jobs that arises following mergers and acquisitions. But many of the job reductions augur further cutbacks in manufacturing in the U.S. and Europe, as companies seek the same savings from outsourcing production to Asia that numerous other industries have reaped over much of the past generation.

    Below is a list of biopharma companies ranked by the 10 largest numbers of job reductions disclosed in 2013. Each company is listed by name, the number of disclosed layoffs, details on the layoffs if any, the justification furnished by the company for the cuts, and the size of the company’s total workforce.

  • #10. Endo Health Solutions

    Number of job layoffs disclosed: About 700 jobs

    Details: Company said June 6 it will eliminate 15% of its workforce worldwide. Company has not stated where jobs will be cut, but suggested at selling, general, and administrative (SG&A) and research job reductions by tying the layoffs to a restructuring whose goals include “streamlining general and administrative expenses, optimizing commercial spend and refocusing R&D onto lower-risk projects and higher-return investments in generics.”

    Why the company did it: Part of a restructuring that included seeking more acquisitions, selling its HealthTronics urological business1 and branded pharmaceutical early-stage discovery platform, and restructuring its R&D effort. Restructuring was unveiled after company failed to stop a generic version of its Opana ER (oxymorphone HCl) moderate-to-severe pain drug from reaching the market.

    Size of total workforce: Workforce shrinking from a total 4,629 employees as of February 20, 2013.2

  • #9. Actavis

    Number of job layoffs disclosed: 813 jobs

    Details: 350 jobs at Actavis Specialty Brands, the company’s business that more than 40 brand pharmaceutical products, primarily in the U.S. and Canada; all 310 jobs at Lincolnton, NC, manufacturing plant, which the company said it will shut down by mid-2015; 88 jobs in Rockaway, NJ, where Warner Chilcott was formerly headquartered; 65 jobs at manufacturing plant in Corona, CA.

    Why the company did it: Actavis has cited need to eliminate staffing and operations overlaps following $8.5 billion acquisition of Warner Chilcott, completed October 1. Actavis said it would continue to employ 750 at U.S. Specialty Brands, which had a pre-layoff workforce of 1,100. Lincolnton, NC, production of prescription drugs will be shifted to an Actavis site in Salt Lake City, while over-the-counter drug production will be shifted to contract manufacturers. No explanation for job cuts at Rockaway, NJ, which Actavis retains as “New Jersey Corporate Office”. Job cuts in Corona, CA, part of a plan to reposition the facility into a “Center of Excellence” for manufacturing oral contraceptives, following a 12-year dispute with the FDA over agency allegations of GMP violations stretching back to predecessor Watson Pharmaceuticals.3,4

    Size of total workforce: Workforce will shrink from a total of approximately 17,700 employees as of December 31, 2012.

  • #8. Takeda Pharmaceutical

    Number of job layoffs disclosed: 1,500 jobs

    Details: Takeda executive disclosed plan for workforce reduction of 5% or about 1,500 positions.5

    Why the company did it: Planned job cut would be part of company’s “Project Summit” restructuring initiative, which followed the launch of a generic competitor to Takeda’s diabetes drug Actos. Company has not stated where jobs would be cut, but has identified “four areas of initiatives” in cost-cutting: sales and marketing, production and supply, R&D, and general and administrative.6 On February 4, company identified among its cost-cutting measures “consolidation or manufacturing and R&D facilities” in Europe.7

    Size of total workforce: Workforce will shrink from a total 31,057 employees as of September 30, 2013.

  • #7. Boehringer Ingelheim

    Number of job layoffs disclosed: 1,571 jobs

    Details: All 1,100 jobs at Ben Venue sterile injectables plant in Bedford, OH, which will shut down, the company said October 4; all 240 jobs at API manufacturing plant in Petersburg, VA, announced August 15; 143 sales jobs and 35 administrative jobs in Paris and Reims, France, accounting for 20% of the company’s French subsidiary, disclosed by labor leaders September 9; and 53 jobs at Blanquefort, Gironde, France, following a planned shutdown of the plant operated by subsidiary Labso Fine Chemicals.

    Why the company did it: Company cited projected operating losses at Ben Venue plant of more than $700 million over five years, on top of $350 million spent correcting manufacturing problems like those that led to a 2011 shutdown. Petersburg, VA, plant shut down after company concluded it needed to shrink manufacturing capabilities, then failed to find a buyer for the plant; company also cited overall production overcapacity in the pharma industry and competition from foreign-produced materials. Shutdown of the Blanquefort plant—the last operated by the company in France—was part of a reorganization of the company’s chemical plants designed to reduce manufacturing overcapacity.8

    Size of total workforce: Workforce shrunk from 46,228 employees at the end of 2012.

  • #6. Eli Lilly

    Number of job layoffs disclosed: Up to 1,624 jobs9

    Details: An anticipated, roughly 1,245 full-time U.S sales employees eliminated starting June 30, 2013, in U.S. biomedicines division—of which about 560 “will have opportunities to be placed in open roles and, if so placed, will not be terminated”; as well as 379 fixed-duration contract employees, 97 of whom worked under contracts that ended before, but were extended to, June 30.9,10

    Why the company did it: A response to “changing customer requirements, evolutions in the U.S. health care environment and the upcoming loss in exclusivity” and projected drop in sales as patent protection expires in December on the antidepressant Cymbalta (duloxetine hydrochloride), and in March 2014 on the osteoporosis drug Evista (raloxifene hydrochloride).

    Size of total workforce: Workforce reduced to 37,925 employees as of the end of 2013.