AstraZeneca will reduce its workforce by approximately 7,300 positions in new restructuring plans it hopes will strengthen the company’s commercial, operations and R&D capabilities.
Around 3,750 jobs will be axed from its sales, general and administrative division, 2,200 jobs from its R&D unit and a further 1,350 positions from its operations functions.
David Brennan, CEO, says the “initiatives” should be viewed in a “strategic context” as the company faces various challenges in a “rapidly changing healthcare environment”.
The new plans are hoped to deliver annual savings of around $1.6bn by the end of 2014 at a cost of $2.1bn.
Within its sales, general and admin category, AZ aims to continue to drive efficiencies, reduce non-customer facing support groups and introduce new measures to deal with the needs of customers.
It has already reduced its sales and marketing regions from five to three and now aims to cluster smaller countries together to “optimise resources, increase shared services and reduce costs”, it says. Digital technology and the use of call centres for sales and medical advice will be introduced as AZ uses new customer channels to provide “innovative, high quality services”, it says, at lower costs.
Research and development plans unveiled in January 2010 will now be accelerated in a move to create a “simpler and more innovative” division with a lower and more flexible cost base. A focus has been placed in the neuroscience therapy area with AZ believing a combination of internal expertise and external science will help realise unmet need. As a result, the company will create ‘virtual’ neuroscience Innovative Medicines unit (iMed) made up of a small team of around 40 to 50 AstraZeneca scientists.
These teams will be based in the UK at Cambridge and in the US in Boston but will see sites in Södertälje in Sweden and Montreal in Canada end R&D activity. The Canadian plant will also close completely.
Finally, further job cuts will be made to the company’s operations unit in a move to improve the “efficiency and effectiveness” of its supply chain, the company says. It will also outsource certain manufacturing activities.
The company says it aware of the impact the job losses will have on its employees, but restructuring is needed after its 2011 financial results showed a loss in revenue of $3bn after global pricing restrictions and generic competition.
“AstraZeneca remains fully committed to our long-term, focused, innovation-driven biopharmaceutical strategy,” said David Brennan. “Since 2007, when we announced our first major restructuring programme, we have taken decisive steps to improve returns on investment, recognising that this demands concerted, enterprise-wide action.
“We are acutely aware that these decisions will affect many employees and we will strive to support our people as we implement these changes.”