PFIZER TO CUT WORK FORCE BY 10,000, CLOSE MANUFACTURING SITES
Pfizer is making major changes in the way the company is run in an effort to drive down costs, increase revenue and enhance innovation, Pfizer announced at a meeting of its senior staff.
While the company saw its 2006 revenue grow 2 percent, up to $48.4 billion, Pfizer faces "significant challenges in a profoundly changing business environment," Jeffrey Kindler, Pfizer's chairman and CEO, said. "I believe Pfizer must transform the way we've done business in the past in order to be successful in the future," he added.
The company was recently rocked by the failure of torcetrapib, the proposed successor to Pfizer's blockbuster cholesterol drug Lipitor (atorvastatin calcium). Lipitor, the most prescribed drug in the world, is due to go off patent in 2010.
Pfizer stopped clinical trials on torcetrapib due to concerns about death possibly resulting from its use. That decision "was disappointing and brought into sharper focus the need to transform Pfizer over time to succeed in a dynamic healthcare marketplace," Kindler said.
To recover from torcetrapib and address losses due to several of its drugs going off patent, Pfizer will work to increase revenue, drop costs and improve its infrastructure, it said. For example, the company will try to improve its long-term financial outlook by strengthening its vaccine and antibody production and simplifying the organizational structure of its R&D division.
Pfizer is also planning to cut between $1.5 billion and $2 billion in expenses by the end of 2008. To reach that goal, the company will eliminate 10 percent of its work force, or about 10,000 positions, including previously announced reductions to its U.S. sales force. The company will also close two manufacturing sites and three research sites in the U.S., along with several more overseas.