Merck cutting jobs but area effect unclear

Merck & Co. has cut 1,950 jobs in the first six months of the year as part of two cost-cutting programs announced in 2010 and 2013, and the near-term pain might not be over.

When the massive layoff rounds overlap, the accounting can be more complicated. That was evident in the quarterly statement filed by Merck with the Securities and Exchange Commission.

Merck said in the SEC filing that 1,210 jobs or vacancies likely will be displaced via one program in the last six months of 2015. In the other program, about 2,585 "position eliminations remain pending," and the "remaining actions under this program primarily relate to ongoing manufacturing facility rationalizations, which are expected to be substantially completed by the end of 2016."

Merck, which is based in Kenilworth, N.J., is the 23rd-largest employer in Pennsylvania and the only drug manufacturer among the top 50 employers, according to a year-end 2014 Pennsylvania Department of Labor and Industry report, though current employee figures are unclear. Merck was the top employer in Montgomery County, according to the state report. Its main facilities are in Upper Gwynedd and West Point. The West Point facility makes medicine.

On Friday, Merck spokeswoman Lainie Keller said via email that since June 30, the company completed the previously announced sale of a manufacturing site in Pavia, Italy, while the previously announced sale of a factory in LaVallee, France, was pending.

"Beyond these, I don't have details on any additional plans or details on the remaining workforce reductions," Keller said in the email in response to questions about job cuts in the Philadelphia region.

Merck calls one job-cutting plan "the 2013 Restructuring Program," announced Oct. 1 of that year. It was designed to cut 8,500 positions - employees, contractors, and vacancies - mostly in sales, administration, and marketing. Merck said in the SEC filing that as of June 30, it had eliminated 7,290 of the 8,500 positions. Roughly 1,195 people or vacant positions were displaced in the first six months of 2015. The remainder in that program - 1,210 people or positions - likely will be dropped by the company by the end of this year.

Merck calls the other job-cutting plan the "merger restructuring program," which started in 2010 and refers to the $41 billion takeover of Schering-Plough first announced in 2009. Under that plan - through June 30, Merck said in the filing - the company "has recorded total pretax accumulated costs of approximately $8.2 billion and eliminated approximately 29,160 positions comprised of employee separations, as well as the elimination of contractors and vacant positions."

Yes, you read that correctly: 29,160 positions.

In the six months ending June 30, Merck laid off 755 people or eliminated the vacant positions from the merger restructuring plan.