New York – Pfizer Inc., struggling with fierce competition from makers of generic drugs, announced Monday it will cut 10,000 jobs and close at least five facilities to slash its annual costs by up to $2 billion by next year.
The drastic measures by the world’s largest drugmaker highlight the challenges faced by many pharmaceutical companies these days.
In addition to patent expirations, big drug companies are struggling with a business climate where insurers and other large purchasers of medicines are demanding lower prices and more evidence of products’ worth.
Although big rounds of job cuts typically boost a company’s stock price, shares of Pfizer fell 27 cents, 1 percent, to close Monday at $26.95 on the New York Stock Exchange.
It’s the second time in two years the maker of Viagra and Lipitor has announced a major cost-reduction plan to combat the loss of about $14 billion in revenues this year because of expiring patents. Pfizer is at risk of losing 41 percent of its sales to generic competition between 2010 and 2012, said Prudential analyst Tim Anderson.
The latest cuts come on top of a previously announced plan to cut costs by $4 billion a year by 2008. The 10,000 layoffs amount to about 10 percent of the company’s global workforce and include the elimination of 2,200 jobs from the U.S. sales force, which Pfizer announced late last year.
The company said Monday it would cut 20 percent of its European sales force.
