Bristol-Myers begins cutting jobs
NEW YORK (Reuters) - Bristol-Myers Squibb Co. (BMY.N) said on Friday it has begun cutting jobs as part of a previously announced restructuring by the U.S. drugmaker meant to help bolster earnings growth.
"Over the next few weeks we are informing employees at some of our sites that their positions are being eliminated," company spokesman Jeff Macdonald said. Some employees have already received notices, he said.
Macdonald declined to say how many of the company's 43,000 employees around the world are losing their jobs, or what regions are most affected. Details on the company's so-called "productivity transformation" will be presented on December 5 at a meeting with industry analysts, he said.
One analyst said Bristol-Myers could cut 10 percent of its work force and close half its factories, relying instead on outsourcing to manufacture its prescription medicines.
Company Chief Executive Officer James Cornelius, following an industry trend of cutting jobs and other expenses amid generic competition for big-selling medicines, in July announced the restructuring and said work-force reductions would take place by year end.
Savings from job cuts and downsizing or closures of company plants would enable Bristol-Myers to pump more money into developing new prescription drugs, Cornelius said.
Deutsche Bank analyst Barbara Ryan said on Thursday Bristol-Myers is trying to trim costs before the U.S. patent lapses in November 2011 on its biggest product, the blood clot preventer Plavix which it sells in partnership with Sanofi-Aventis (SASY.PA). The drug has annual global sales of more than $5 billion.
Ryan said Bristol-Myers could eliminate 10 percent of its work force in the next three years, mainly in manufacturing.
"We expect that Bristol-Myers will aim for a reduction in the number of manufacturing facilities of 50 percent by 2010, through the increased use of outsourcing" and other methods, including selling off older products that are not greatly profitable.
"These efforts could save Bristol-Myers $500 million to $1 billion per year, for a cumulative total of $1.5 billion to $2 billion in savings," Ryan said in a research note.
Moreover, Ryan said Bristol-Myers could decide to sell off its "non-pharma" businesses --including its nutritionals and medical imaging units to raise cash that can be plowed into research for more profitable prescription drugs.
(Reporting by Ransdell Pierson, editing by Dave Zimmerman)
