Those Pharma Job Cuts Keep Coming, But…
6 CommentsBy Ed Silverman // February 2nd, 2011 // 9:11 am
What a difference a day can make. This morning, the latest employment tally issued by Challenger Gray & Christmas indicates the number of layoffs undertaken in January by drugmakers was eclipsed by a few other industries, such as finance, construction, aerospace and retail. For the first time in quite a while, the pharmaceutical industry did not make the top five among employers issuing pink slips.
To be specific, the outplacement consultants counted 2,090 jobs cut last month, which is down from the roughly 3,500 positions eliminated in December and 4,900 cut in November, for instance. To some, this downtick may have been viewed as mildly heartening news. But then, of course, we recall the plans announced yesterday by Pfizer, which will elminate up to 3,500 jobs, including 1,100 at facilities in the Northeast (read here).
And of course, Abbott Laboratories last week disclosed plans to chop 1,900 positions (see this). In other words, the trend toward job losses continues. And it is worth noting that the firm usually does not include cuts at related companies so, for instance, the pending elimination of jobs after IMS Health completes its acquistion of SDI Health (look here) would not show up in the tally (see the latest CG&C report here).
At the same time, the firm indicates the pharmaceutical industry plans to add 1,700 jobs, which underscores some caveats. First, selective hiring does continue for various positions at numerous companies. At the same time, though, not all job cuts are disclosed, since some companies eliminate staff in dribs and drabs and, therefore, are not required to file notices with their state governments. The implication is that job losses may be greater than the survey implies. So the net effect may, unfortunately, be skewed. And with more patents expiring on big-selling drugs, well, you know…
Salient point
Gov’t/NP is #1, presumably due to the census winding down. Eliminate that & I’m afraid pharma is back in the top 5.
industry insider
Quit forking for “The Man”, like I did a few years back and be your own boss. Besides, it’s a lot more fun.
Dr. Ken B.
What some companies have realized is that it is easier - so very much easier - to get rid of non-performers or other disruptive employees simply by declaring their positions redundant, doing away with the position (& the employee with it) & then filling the position a month or two later under the guise of changing business conditions. Its much easier & faster than trying to do the traditional Termination Dance with your legal beagles internally. I’ve seen companies (or units within companies) decide that they are going to make a 10% reduction, for example, across the board - every department has to select 10% of their staff to terminate - with knowledge that they will open up the recruiting process in a few short months. Excellent way to force the dead wood out without having to waste time internally with your legal department and human resources.
The other thing to note is that as companies farm more and more of their business out of house, job skills needed within the company change, from “doers” to “overseers” of outside contractors. Companies can get more bang for their buck by farming out a lot of the grunt work, and redirect funds to marketing, safety monitoring, etc. Again, different job skills needed. Add to this mix the fact that it is more cost-effective to get younger, less skilled employees to replace old-timers, and the result is you have companies like Abbott tossing a thousand jobs out the door this month, only to hire a thousand next month.
When I see companies farming out massive amounts of work overseas or domestically to CROs and other suppliers, without having the proper checks & balances in place (such as the means to monitor quality), I suspect that all this outsourcing will eventually catch up with the industry. People expect their medications to be thoroughly tested and determined to be safe, but when you see how some of these companies are conducting their R&D, especially their clinical trials, you really have to wonder… Belt-tightening has been long overdue in our industry, but the way in which is it being conducted I find startling and not slightly disturbing.
industry insider
Good points, Dr. Ken. I’m not as that outsourcing clinical R&D saves money as much as it allows companies to keep their FTE headcount low. Much easier to fire a CRO than do a mass reduction of FTE’s, since CRO’S require no severance, COBRA, WARN Notices, union negoatiations, etc.
Pharma Critic
The truth is that the companies don’t get rid of just “non-performers” but many very-qualified, experienced, hard-working individuals who are typically older and more-highly compensated. In addition, the “disruptive” employees they terminate are frquently those who have dared to question unethical or illegal activities and are therefore not “good soldiers.” It’s really pathetic what’s happening in the industry, but the top execs have to figure out how to maintain their outrageous bonuses and stock compensation so they can continue to live their lavish lifestyles while thousands of others are unemployed and can’t find jobs! Fat cats without morals!!
Ethical Monitor
Pharma Critic is right. I had a 98% performance rating when I was fired in August from GSK. I would not call that dead wood. As a study monitor it is my job by both federal requirements and industry standards (Good Clinical Practices) to report fraud and study misconduct that resulted in inaccurate data. I guess telling my Manager about the fraud and inaccurate data was considered disruptive even though it was a required part of my job. No doubt I was replaced by a much younger “good soldier”.
Job or ethical standards? The decision is not tough for me but living without heat and food is. Even worse I cannot afford the drugs I have helped get on the market over the past 25 years. Believe me I wish I could be someone who just dosen’t care about doing my job well, or the study subject, or the future patient that may be harmed by the process of “doing business”. I should try to get a job with the company that is researching cannabis - maybe I wouldn’t care so much about the quality of my work.
Dr. Ken is right too- changes are needed to resolve the same old problems in clinical research that have been around for decades. But how we are going about making changes arecausing more problems not resolving them . Bad drugs not only hurt patients but it hurts ethical employees of Big Pharma too.