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Home Industry News MSD to unveil ‘job slashing’ restructuring plan

MSD to unveil ‘job slashing’ restructuring plan

28th November 2005

MSD (Merck Sharp & Dohme) is set to unveil a restructuring plan that will involve thousands of job cuts and major changes in its operations, according to a report in the Wall Street Journal.

The paper reported that MSD had briefed its board on the final details of its planned cuts, including several plant closings within and outside the US and a tighter focus on certain disease-research areas.

There have been reports that the company is preparing to cut as much as 20 per cent of its sales force.

The company has been under pressure from investors and analysts after its share price has fallen almost 70 per cent in the last five years.

The world’s fifth largest drug manufacturer also faces billions of dollars in liability from 6,400 lawsuits over its recalled Vioxx painkiller.

“As Merck has stated, we are carefully considering a variety of options to help improve our core business fundamentals and ultimately position Merck to meet the challenges the company faces now and in the future,” MSD spokesman Christopher Loder said yesterday.

“We have committed to provide details about our plans as well as milestones and metrics that can be used to evaluate our progress against them by the end of the year, and we will.”

In the first nine months of 2005, MSD’s sales fell about 5.5 per cent compared to 2004. Its profits declined 12 per cent.

The company currently has a global workforce of 62,000 but said it spent $80 million on “ongoing global position eliminations” in the third quarter of 2005.
When asked by about the restructuring by Bloomberg, MSD CEO Richard Clark said:” The announcement will be soon,” adding: “We want to tell our employees first”

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