Merck to Cut 7200 Jobs

Whitehouse Station, NJ (Oct. 22)-Merck plans to cut approximately 7200 positions as part of its 2008 restructuring plan, according to an Oct. 22 press release focused on the company’s third-quarter financial results. The cuts, which will include 6800 active employees and 400 vacancies, are part of the company’s efforts to reduce costs. The staff eliminations will affect all areas of the company worldwide by the end of 2011, with about 40% of total reductions taking place in the United States, about 25% affecting senior and mid-level executives.

“Merck remains confident in the progress it is making in creating a new business model that is more customer-centric, more agile, and has a variable cost structure that enables investment in key growth areas such as research and development and new products and markets,” said the release.

The 7000+ cuts are in addition to the 10,400 positions eliminated as part of Merck’s 2005 restructuring program, which was substantially complete at the end of September 2008.  As of Sept. 30, stated the release, Merck had approximately 56,700 employees.

The company plans to “make greater use of outside technology resources, centralize common sales and marketing activities, and consolidate and streamline its operations. Merck's manufacturing division will further focus its capabilities on core products and outsource non-core manufacturing,” said the release.

As part of these goals, three research sites will close by the end of 2009: Tsukuba, Japan; Pomezia, Italy; and Seattle. 

Merck expects its global restructuring program to be completed by the end of 2011, and total pretax costs are estimated at $1.6 billion to $2.0 billion.