Novartis To Cut 2,500 Jobs, Save $1.6 Billion
4 CommentsBy Ed Silverman // December 13th, 2007 // 6:57 am
As promised, the drugmaker is making good on promises telegraphed a couple of months ago. The layoffs amount to 2.5 percent of its global workforce of approximately 100,000 employees, and will require a charge of $450 million in this quarter. The savings are expected to be realized by 2010.
The reorg, which Novartis has dubbed ‘Forward,’ comes in response to problems facing most big drugmakers these days - a thinning pipeline, tougher regulatory hurdles for newly developed drugs and safety issues with existing products. In particular, Novartis suffered a series of setbacks this year - its Zelnorm med for irritable bowel syndrome was withdrawn in the US (although it’s made a limited return), there were ongoing delays with its Galvus diabetes pill and safety questions scuttled plans to seek US approval for its Prexige Cox-2 inhibitor painkiller.
“We have taken the opportunity given the short-term down-cycle in our pharmaceuticals business to initiate this project. This will simplify our organization and redesign the way we operate. Forward will increase speed and productivity in anticipation of accelerating growth in the second half of 2008,” says Novartis ceo Dan Vasella, in a statement.
The move comes two months after Novartis announced plans to cut 1,250 jobs from its US pharma biz, mostly in sales and marketing.
Jen Morris
Alas, Novartis’s projected savings in USD won’t be as impressive when they shrink along with the dollar.
Money not spent is not quite the same as money in hand, now is it? For want of a pipeline, pharma goes Lilliputian.
Someone
Novartis is suffering some serious trouble this year. Let’s not forget the whistle blower law suit, and the FDA “Black Box” warning on their newly approved 2nd generation Tyrosine Kinase Inhibitor. reports from the recent ASH conference show that just about 50% of patients on clinical trials with their new drug Nilotinib have to drop out and are unable to comply with the fasting and dietary restrictions. Oh yeah, and the share holders filed their own law suit a month or so ago. They are a bit unhappy with the stock performance. Seems that early reports of Nilotinib were very overstated which inflated stock prices. When news of the Black Box warning hit, prices dropped causing some financial damage to share holders. Wasn’t this already reported here?
Anyway, I hear cancer patients are nervous.
Interestingly enough, the lay offs will probably not affect Dan Vasella or his $34 million US annual salary. Just think if he gave up some of his excessive salary some patients who are selling their homes to stay on the drugs might be able to afford Christmas dinner…
I wonder if there is anyway to start getting the big guys to pay it back….
kuku
novartis, explota a sus empleados…
no paga bien….
Truth is Bitter
James Shannon was too good to be at Novartis. He is such a gengle man. Novartis needs to send the whole of Oncology crooks parking. The monsters there have no respect for family, ethics or even business ideals. If Novartis wants to turn the page, they have a golden opportunity to clean all the rotten eggs and find some new ones who can run the company effectively. “Someone” above wrote about “black-box” and whistleblowers” The solution is first to fire each executive involved in any legal suit to send a message that Novartis is an ethical company and not a den of bullies piling up legal cases against the company.
Please share this Blog with the new CEO. He needs to start with a clean and pure slate and not a bunch of cheer leaders. Jame is such a cool-headed leader. He pulls people together. He does not tear people down. I miss you!Good luck James. I love ya!