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Merck Plans 13K Job Cuts

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The second largest drug manufacturer in the United States, Merck & Co.(NYSE:MRK) plans to cut an additional 12000 to 13000 jobs by the year 2015 in an effort to save as much as $ 4.6 billion per year as an expansion of its restructuring program.

More than 14 percent of Merck’s total workforce of 91000 employees will be losing their jobs. The Whitehouse Station, New Jersey based Merck & Co.  is on a cost cutting spree and also expanding itself in the emerging markets . The company is also spending much on the research and development in order to gain momentum before the patent exclusivity of its asthma treatment Singulair expires next year.  Victrelis, a new hepatitis C drug has been recently introduced by the company and Merck is also conducting trials on an experimental treatment aimed at raising the levels of good cholesterol on 30000 patients.


Davis Maris, an analyst with the New York based CLSA said on a telephonic interview that Merck & Co. is currently focused on costs and that is exactly what is required under the new operating environment.

Merck fell by 2.2 percent or around 77 cents to $ 34.16 at the New York Stock Exchange composite trading. The shares have declined by about 3.1 percent in this current year until today.  The spokesperson for Merck, David Caouette said over telephone that the company will continue hiring in the emerging markets and growth areas.

Caouette also said that the job cuts will be disproportionate as the non revenue generating areas will be eliminated. The positions to be eliminated will include administrative and headquarters positions followed by consolidation of offices and shutting down of animal health manufacturing plants.

Compared to the previous year, the net income of the company has increased almost three fold to $ 2.02 billion from $ 752 million. According to a Merck’s statement today, the previous year’s earnings were low due to the acquisition related costs. The sales have increased beyond the analysts’ expectation of $ 11.8 billion to $ 12.2 billion.

In the second quarter, the sales of Januvia, a diabetes drug has increased by 30 percent to $ 779 million, following the same trend is the sales of Remicade, a treatment for arthritis and inflammatory diseases increased by 26 percent to $ 842 million. The company also stated that the global sales were boosted by 4 percent after there was a slide in the dollar’s value against other currencies.

 

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Post Written By: Ed Liston

Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications. He is widely quoted in various financial publications on the Internet. When Ed is not writing about stocks, investing in stocks, talking about stocks, or otherwise doing something stock related, he likes to go sailing and fishing in his yacht.


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Ed Liston

Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications. He is widely quoted in various financial publications on the Internet. When Ed is not writing about stocks, investing in stocks, talking about stocks, or otherwise doing something stock related, he likes to go sailing and fishing.

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