Pfizer looking at around 6,000 job cuts in plant network reconfiguration

Operations to expand at some sites, but eight are targeted for exit and reductions are recommended at six others

Jeffrey Bouley
NEW YORK—Well, it's not a surprise to, well—pretty much anyone—that the acquisition of Wyeth by Pfizer would result in some more job cuts, and another round of them has been announced. Since the closing of the Wyeth deal in October, Pfizer has axed 6,900 jobs, primarily in its U.S. sales force, manufacturing and R&D operations—and as of May 18 the company has announced that another 6,000 jobs are going to go over the next several years as part of Pfizer Global Manufacturing's plans to reconfigure its worldwide plant network.

Pfizer is looking "to create a fully aligned manufacturing and supply organization from the combined networks of Pfizer and Wyeth" and that involves, in part, recommendations to cease operations at eight manufacturing sites in Ireland, Puerto Rico and the United States by the end of 2015, as well as to reduce operations at six other plants in Germany, Ireland, Puerto Rico, the United Kingdom and the United States.

These job eliminations and resource consolidation effort are part of Pfizer's larger plan to eliminate more than 19,000 jobs by the end of 2012, and Pfizer's vice president of external affairs, Ray Kerins, says the company is on schedule to meet that goal—in the process it aims to reduce its costs by $4 billion to $5 billion by the end of 2012.

"The restructuring of our global plant network is critical to our efforts to remain competitive so that we can continue to meet patient needs and expand the access and affordability of our medicines," says Nat Ricciardi, president of Pfizer Global Manufacturing.

The planned reductions reportedly will increase manufacturing efficiency and lower costs by more effectively using resources and technology, improving plant processes, eliminating excess capacity, and better aligning production with market demand.

In addition, product transfers are expected to expand the roles of some plants in Pfizer's manufacturing network, which may see staffing gains.

"Nevertheless, today's announcement is very difficult to make because of its impact on our colleagues," Ricciardi notes. "We have a tremendous global workforce and some of the best manufacturing facilities in the industry. But we must continue to adjust to the fast-changing and extremely competitive environment in which we operate. That means realigning our network and reducing our manufacturing capacity so that we can position Pfizer for the next phase of growth across biopharmaceuticals and our diversified business portfolio."

Ricciardi also stresses half the plant on the list to cease operations are legacy Pfizer plants, so the cuts are "not disproportionately Wyeth." He also notes that where possible, Pfizer will look to sell plants to new owners who might continue to operate them, perhaps with staff already in place at them. "We're not announcing closures, we're announcing exits," he maintains.

The announcement is the culmination of what Pfizer calls an "intense" half-year evaluation of sites that manufacture aseptic (injectable), solid-dose (such as pills) and biotechnology medicines, as well as consumer healthcare products.

Pfizer plans to discontinue manufacturing operations over the next 18 months to five years at three solid-dose sites that manufacture tablets and capsules: Caguas in Puerto Rico; Loughbeg in Ireland; and Rouses Point, N.Y., in the United States. The Rouses Point news is truly no surprise, as Wyeth had previously announced in 2005 that it would exit that site.

The company also plans to phase out pharmaceutical solid-dose manufacturing at Guayama, Puerto Rico, and that site will expand its Consumer Healthcare operations.

Pfizer bought Wyeth in part to gain access to fast-growing biotechnology drugs and vaccines, as patent expiry loomed for in 2011 for Lipitor,  the company's blockbuster high-cholesterol drug, which boasted sales of $11.4 billion in 2009. But Pfizer officials note that the combination of the two companies has resulted in excess production capacity that it cannot afford, among other unacceptable expenses that need to be trimmed.
 

Jeffrey Bouley

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