Drugmaker Merck & Co., said Tuesday morning that it will cut about 8,500 jobs from commercial and research-and-development departments in hopes of reducing annual operating expenses by $2.5 billion by the end of 2015.
Merck is based, for the moment, in Whitehouse Station, N.J., and has operations elsewhere in New Jersey and suburban Philadelphia, including West Point and Blue Bell.
A Merck spokeswoman would not specify how many jobs will be eliminated at each facility or whether Philly-area facilities will be shut entirely.
The company did say it was again changing plans for moving its headquarters, also in hopes of saving money. Previously, Merck said it would vacate the Whitehouse Station office and move those people to an existing facility in Summit, N.J. On Tuesday, Merck said it will close the Whitehouse Station building and the Summit campus, with remaining employees moving to another existing facility in Kenilworth, N.J. The moving will commence in 2014 and be completed by 2015, Merck said.
"These actions will make Merck a more competitive company, better positioned to drive innovation and to more effectively commercialize medicines and vaccines for the people who need them," Merck chief executive and Philadelphia native Kenneth C. Frazier said in a statement. "Today's announcement further underscores that we are committed to improving our performance in the short term while also investing for the long term to create value for patients, customers and shareholders."
In Tuesday's Inquirer, Paul Mercurio, recording secretary for United Steelworkers Union Local 10-00086, which has just under 2,000 members at the Merck facility in West Point, said the company offered buyout packages to union workers on Sept. 20 amid talk of other cut backs. Though registration is required, a link to the story is here.
"We hear more cuts are coming in the management ranks," Mercurio told the Inquirer Monday evening.
Tuesday's cuts are on top of more than 20,000 job cuts that Merck has made since it bought Schering-Plough in late 2009.
Merck said in an SEC filing in August that it had set aside $418 million in the first six months of 2013 for restructuring costs, mostly employee severance. That was less than in the same period of 2012, but both are part of a phase of downsizing that began after the Schering-Plough deal. (The Schering-Plough phase followed a 2008 downsizing.) From 2010 through June 30, 2013, that program eliminated 23,810 positions, including full-time employees, contractors, and vacant positions, according to the SEC filing.