Amgen to cut workforce by 15% with loss of up to 2,900 jobs

30-Jul-2014

To enable resources to be reallocated to invest in new medicines and drive growth

US biotechnology company Amgen plans to axe 15% of its workforce and close its facilities in Colorado and Washington state with the loss of between 2,400 to 2,900 jobs.

The job cuts, most of them in the US, will start later this year and continue throughout 2015, the company said.

Amgen said the job cuts and restructuring were necessary to 'accelerate our long-term strategy for growth and to strengthen our position as a leading global biotechnology company' by releasing cash to invest in its pipeline.

The company's research and manufacturing sites in Seattle and Bothell, WA, and Boulder and Longmont, CO, will be closed, including the Helix research campus in Seattle, which employs more than 600 people.

Amgen will retain its headquarters in Thousand Oaks, CA, but with a reduced number of staff consolidated into fewer buildings. At the same time, the company will expand its presence in the biotechnology hub of South San Francisco, CA and Cambridge, MA.

Company-wide, these actions will result in a 23% reduction in the company's facilities footprint, Amgen said.

The moves are expected to result in pre-tax accounting charges in the range of US$775–$990m, primarily incurred in 2014–2015.

From a position of strength, we have announced today restructuring initiatives that will allow us to reallocate resources to invest in our upcoming launches

The company said it was evaluating further cuts, particularly in shared services, to support its growth going forward.

Amgen made the announcement as it reported an 11% increase in revenue in the second quarter of 2014 to $5.18bn, with 8% product growth, driven by strong performance across its portfolio, particularly for rheumatoid arthritis drug Enbrel, Kyprolis for treating relapsed and refractory multiple myeloma, osteoporosis drug Prolia and bone cancer treatment Xgeva.

Adjusted net income increased 26% to $1.8bn.

'Robust growth through the first half of 2014 affirms the underlying strength of our business,' said Robert Bradway, Chairman and Chief Executive.

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'We are making excellent progress in advancing our pipeline as we prepare to launch a number of promising new innovative medicines. From a position of strength, we have announced today restructuring initiatives that will allow us to reallocate resources to invest in our upcoming launches and drive growth.'

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