Merck speeding up layoffs of many US employees

September 20, 2011 - 12:15 PM
Merck Layoffs

FILE - This May 22, 2008 file photo, shows the company logo on the doors of a building at Merck & Co. Inc. headquarters in Whitehouse Station, N.J. Drugmaker Merck & Co. has told employees it can't reach its goal of cutting up to 13,000 jobs by 2015 just by eliminating vacant jobs Tuesday, Sept. 20, 2011, so it is speeding up layoffs in the U.S. (AP Photo/Mel Evans, file)

WHITEHOUSE STATION, N.J. (AP) — Drugmaker Merck & Co. has told employees it can't reach its goal of cutting up to 13,000 jobs by 2015 just by eliminating vacant jobs, so it is speeding up layoffs in the U.S.

According to an internal memo, by the end of October Merck will notify employees losing their jobs in sales and other departments. The memo states the teams affected are: marketing & customer solutions; managed markets & policy; strategy & commercial model innovation; and the neuropsychiatric and women's healthcare specialty sales teams.

The memo, titled "Update on Ongoing Changes to the US Market's Business Operations," was sent Sept. 15 by Mark Timney, Merck's President US Market. It was first reported by the Pharmalot blog.

"The unfortunate reality is that we must do more and move now if Merck is to be successful over the long term," Timney wrote. "Making difficult choices in select functions, based on an assessment of the business risks and opportunities identified within each area, will allow us to transform our business and capitalize on the most significant market opportunities in 2012 and beyond."

When Merck announced its second-quarter earnings on July 29, Merck said the cuts were needed because generic competition next year will hurt its top-selling drug, asthma and allergy medicine Singulair. Merck also cited slower revenue growth in the U.S. and Europe, where government health programs have been pressing for lower prices.

At the time, Merck said the cuts would not start in earnest until next year.

A Merck spokesman said 35 percent to 40 percent of the job cuts would be in the United States, many at its headquarters in Whitehouse Station, N.J.

The new cuts will bring to 30,000 the positions eliminated since Merck's November 2009 megadeal to buy Schering-Plough Corp., on top of about 5,000 positions the companies cut before the deal closed.

In afternoon trading, Merck shares added 49 cents to $32.74.