Pfizer Plans To Eliminate 10,000 Jobs, Close 3 Manufacturing Plants and 5 R&D Sites

On December 2nd 2006, Pfizer announced that it had stopped all development and clinical trials for its cholesterol drug Torcetrapib.

Torcetrapib was widely regarded as the company’s next blockbuster and was expected to invigorate Pfizer sales, hurt by a number of patent expirations on key products. Pfizer had already spent around $800 million to develop Torcetrapib.

So it was not unexpected that yesterday, CEO Jeffrey Kindler announced significant cost cutting measures at the largest Pharmaceutical company in the world. (See video of Kindler’s announcement)

During his presentation to analysts, Kindler said: “Today we are detailing steps that will both reduce our absolute costs and set the stage for a more flexible cost structure adaptable to changing business conditions and needs”  he continued “Across the entire company we will cut costs in staff functions, procurement and bricks and mortar.”

To support these cost cutting measures, Pfizer will close 3 manufacturing plants and 5 research sites. This will result in the elimination of 10,000 jobs, which represents 10% of the company’s worldwide workforce.

Additionally, Kindler identified the following five immediate priorities geared at ensuring success for all Pfizer stakeholders:

  • Maximizing revenues in the short and long term
  • Establishing a lower more flexible cost base
  • Creating smaller more accountable operating units that can still draw on the advantages of our scale and resources
  • Engaging collaboratively with patients, customers and business partners
  • Making Pfizer a great place to work

Will other Big Pharma follow Pfizer’s lead? Only time will tell. 

One thing is certain; the industry continues to experience unprecedented economic, socio-political and regulatory pressures.

As I discussed in “Are We Witnessing the Beginning of the End for Big Pharma?“, for Big Pharma to survive and thrive, it must adapt and change.

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