Merck to cut 7,000 jobs in global restructuring
Global drug research company Merck has announced proposals to close plants and cut 7,000 jobs by the end of 2008 as part of a major restructuring programme.
Global drug research company Merck has announced proposals to close plants and cut 7,000 jobs by the end of 2008 as part of a major restructuring programme.
It said in this initial stage of the restructuring, that five of its 31 manufacturing facilities are to be closed or sold and it will implementation of a new supply strategy to create a leaner, more cost-effective and customer-focused manufacturing model over the next three years.
'The actions we are announcing today are an important first step in positioning Merck to meet the challenges the company faces now and in the future,' said Richard Clark, chief executive officer and president. Merck expects the initial phase of the cost reduction programme to yield cumulative pretax savings of $3.5 bn to $4.0 bn from 2006 through to 2010.
The company is looking to cut about 11% of its global work force by the end of 2008, with around half of the position reductions expected to occur in the US. In addition to the five manufacturing facility closures worldwide the company plans to reduce operations at a number of other sites and close one basic research site and two preclinical development sites.
Merck is also implementing a global rollout of lean manufacturing principles to reduce the time from customer order to manufacturing, and streamline the production system to reduce manufacturing costs. It said a pilot program now under way at its pharmaceutical manufacturing site in Arecibo, Puerto Rico, is delivering a 50% reduction in on-site cycle time and inventory reduction of greater than 30%.