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Drugmaker Wyeth Could Lay Off 10% Of Global Workers

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By LINDA A. JOHNSON, The Associated Press

Published: January 26, 2008

TRENTON, N.J. - Wyeth is telling managers that about 10 percent of its 50,000 employees worldwide may lose their jobs by 2011 under a planned restructuring, three years after the drugmaker scaled back its sales force.
Wyeth spokesman Doug Petkus said Friday that discussions with managers began Thursday and are continuing as the company looks for ways to transform its business, lower its costs and boost growth. He said one option being evaluated is job cuts; the company has not identified other possibilities.

"We need to become more efficient, we need to invest in our business and we need to facilitate growth," Petkus said in an interview.

"Nothing is etched in stone, and it is premature to discuss how many or which positions may be affected, or how the reductions will be achieved."
Petkus said Wyeth officials plan to share details of the initiative with workers near the end of March.

Like most of its competitors, Wyeth, based in Madison, N.J., has been struggling with increased competition and a shrinking pipeline of new drugs.

Industry heavyweights, including Pfizer, GlaxoSmithKline PLC and Johnson & Johnson, all have announced layoffs and other cost-cutting moves in the past year or two.
Wyeth has had the additional problem of repeated setbacks with U.S. regulators. Since April, the Food and Drug Administration on four occasions has rejected approval of a Wyeth drug, demanded additional information or required an entire new study, significantly delaying expected launches of heavily touted new products.

In addition, sales of its No. 3 drug, Protonix, for severe heartburn, fell 6 percent in the third quarter to $425 million. Some generic drugmakers have been challenging the drug's patent ahead of its expiration in July 2010, and one, Teva Pharmaceutical Industries Ltd. of Israel, might begin selling a generic version as early as next month.
Wyeth began its last cutback program in 2005, which included reducing its sales force by about 15 percent.

In October, Wyeth reported that during the first nine months of 2007, its net income rose nearly 8 percent to $3.6 billion and revenue jumped 10 percent to $16.6 billion. However, in the third quarter, profit dropped 1 percent because of sharply higher production costs and taxes; a charge for ongoing restructuring, including severance pay; depreciation of some manufacturing plants; and the shutdown of one factory.

When the third-quarter results were reported, company executives said they still expected full-year earnings per share to range from $3.48 to $3.56, up about 12 percent from last year.
Wyeth is to report its fourth-quarter and full year financial results Thursday.

Friday, the company's board of directors voted to declare dividends of 28 cents per share of common stock and 50 cents per share of preferred stock. Wyeth shares fell $1.98 to $40.86.

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