• SKIP TO CONTENT
  • SKIP NAVIGATION
  • Patient Resources
    • COVID-19 Patient Resource Center
    • Clinical Trials
    • Search Clinical Trials
    • Patient Notification System
    • What is Clinical Research?
    • Volunteering for a Clinical Trial
    • Understanding Informed Consent
    • Useful Resources
    • FDA Approved Drugs
  • Professional Resources
    • Research Center Profiles
    • Clinical Trial Listings
    • Market Research
    • FDA Approved Drugs
    • Training Guides
    • Books
    • eLearning
    • Events
    • Newsletters
    • White Papers
    • SOPs
    • eCFR and Guidances
  • White Papers
  • Trial Listings
  • Advertise
  • COVID-19
  • iConnect
  • Sign In
  • Create Account
  • Sign Out
  • My Account
Home » Merck to cut another 8,500 jobs, sharpen pipeline, shutter facilities

Merck to cut another 8,500 jobs, sharpen pipeline, shutter facilities

October 2, 2013
CenterWatch Staff

In a move to create greater efficiencies, Merck announced the elimination of another 8,500 positions, in addition to previously reported reductions of 7,500 jobs, with a goal of paring annual operating expenses by approximately $2.5 billion by the end of 2015.

Merck said the multi-year initiative will enable Merck to better target its resources behind those opportunities that have the potential to deliver the greatest return on investment, including bolstering its pipeline and implementing a more agile operating model, with a significantly reduced, more flexible cost structure.

By the end of 2015, the workforce reductions will result in a decrease of about 20% in Merck’s total global workforce of 81,000 employees. Total pre-tax costs for the new restructuring program are estimated to range between $2.5 billion and $3 billion. The company estimates that approximately two-thirds of these costs will result in cash outlays, primarily related to separation expense, and approximately one-third are non-cash, primarily related to accelerated depreciation of facilities to be closed or divested.

The company said half the cuts will come from marketing and administrative expense and the rest from R&D, with Merck expecting to realize $1 billion in annual savings by the end of next year.

CEO Kenneth C. Frazier said the cuts are designed to strengthen Merck “by sharpening our commercial and R&D focus on our best growth opportunities.” The global initiative will focus on three key areas: the redesigned operating model and reduced cost base, sharpened commercial focus and refocused and prioritized R&D.

Frazier said the downsizing does not represent a change in strategy, but allows Merck to exploit its soundest opportunities, which he defined as vaccines, oncology, diabetes and acute care. Within oncology, the company plans to form an integrated unit to align development and commercial efforts to quickly advance lambrolizumab, its anti-PD-1 immunotherapy. Although the pharma giant will reduce its efforts in other areas, “Merck remains firmly committed to innovation,” Frazier said.

Merck will continue to support its in-line portfolio and prepare for launches in the pipeline. The company will increase its focus in 10 prioritized markets, which account for the majority of revenue in its pharmaceutical and vaccine business: the U.S., Japan, France, Germany, Canada, the U.K., China, Brazil, Russia and Korea.

Merck has prioritized its R&D efforts to focus on candidates capable of providing unambiguous, promotable advantages to patients and payers. Merck will pursue emerging product opportunities independent of therapeutic area or modality and build its biologics capabilities. The company will out-license or discontinue selected late-stage clinical development assets and reduce its focus on platform technologies. The company will make externally sourced programs a greater component of its pipeline strategy

The shuffling of Merck’s assets could offer some upside for biotechs. Merck will accelerate investment in licensing and business development activities to acquire external innovation and commercial opportunities to strengthen its pipeline. It also is focusing on its next-generation hepatitis C virus (HCV) program.

Global headquarters will be moved from Whitehouse Station, N.J., to existing facilities in Kenilworth, N.J. Previously, Merck had planned to relocate its headquarters to Summit, N.J. The new plan is to shutter both the Summit campus and the Whitehouse Station facility, dramatically reducing Merck’s footprint in New Jersey.

Merck’s Animal Health and Consumer Care divisions currently located in Summit will be relocated to another facility in New Jersey. In addition, certain manufacturing, laboratory and other functions currently located in Summit will be relocated to other facilities in New Jersey or Pennsylvania.

Upcoming Events

  • 16Feb

    Fundamentals of FDA Inspection Management: Reduce Anxiety, Increase Inspection Success

  • 21May

    WCG MAGI Clinical Research Conference – 2023 East

Featured Products

  • Spreadsheet Validation: Tools and Techniques to Make Data in Excel Compliant

    Spreadsheet Validation: Tools and Techniques to Make Data in Excel Compliant

  • Surviving an FDA GCP Inspection

    Surviving an FDA GCP Inspection: Resources for Investigators, Sponsors, CROs and IRBs

Featured Stories

  • SurveywBlueBackground-360x240.png

    Sites Name Tech Acceptance as Essential Factor in Selection of Sponsors, Survey Finds

  • TrendsInsights2023-360x240.png

    WCG Clinical Research Trends and Insights for 2023, Part Two

  • TimeMoneyEffort-360x240.png

    Time is Money and So Is Effort, Budgeting Experts Say

  • TrendsInsights2023A-360x240.png

    WCG Clinical Research Trends and Insights for 2023, Part Three

Standard Operating Procedures for Risk-Based Monitoring of Clinical Trials

The information you need to adapt your monitoring plan to changing times.

Learn More Here
  • About Us
  • Contact Us
  • Privacy Policy
  • Do Not Sell or Share My Data

Footer Logo

300 N. Washington St., Suite 200, Falls Church, VA 22046, USA

Phone 617.948.5100 – Toll free 866.219.3440

Copyright © 2023. All Rights Reserved. Design, CMS, Hosting & Web Development :: ePublishing