Moving expenses
It looks like it will be a busy couple of months for people in the moving van industry if the last couple of weeks are anything to go by, as several companies announced substantial layoffs in the hopes of reducing their cash burn rates
TORONTO—It looks like it will be a busy couple of months for people in the moving van industry if the last couple of weeks are anything to go by, as several companies announced substantial layoffs in the hopes of reducing their cash burn rates.
In announcing its Q2 results, AstraZeneca suggested that it might have to cut several thousand jobs across the entire company, with full payback of the expenses not being realized until 2009. In particular, the company pointed to 1800 jobs in its European sales and marketing group, another 1800 in its IS and Business Support group, and about 700 in its clinical R&D group.
A couple of days later, Johnson & Johnson announced it expects to eliminate 3 to 4 percent of its global workforce—likely more than 4000 workers—in the near term as part of its cost-containment effort. According to a company statement, most of these changes will occur "in the Pharmaceuticals segment, which faces significant patent expirations over the next few years, and in the Cordis franchise, which competes in the drug-eluting stent market."
And just last week, as part of its plans to mothball its Hepatitis B drug development project, Anadys Pharmaceuticals announced it would eliminate about one-third of its workforce almost immediately. The company hopes the moves will allow it to focus its resources more effectively on the development and commercialization of its Hepatitis C drug candidates. It projects the staff reductions will generate annual savings of $4-5 million.
The news isn't doom and gloom for everyone, however, as it could prove fruitful for CROs and other participants in the outsourcing industry. Echoing this sentiment, Fred Eschelman, CEO of biotech company PPD, Inc., said "With the biopharmaceutical industry increasingly relying on global outsourcing to speed drug development and reduce costs, demand for our services continues to grow." He should know, as PPD recently announced it would expand its operations in Bellshill, UK, more than doubling its current staff by hiring another 390 to meet demands for its drug development services.
