NEW YORK (Reuters) - Drugmaker Pfizer Inc (PFE.N) will cut 6,000 jobs, or 18 percent of the workforce, at its 78 manufacturing plants over the next five years as it pares back operations following last year’s purchase of rival Wyeth.
The world’s biggest drugmaker plans to cease operations at eight plants in Ireland, Puerto Rico and the United States by late 2015 and reduce activities at six factories in those countries, plus Germany and Britain.
Pfizer had 40 manufacturing sites before acquiring more than three dozen Wyeth facilities in the October merger.
The affected plants make conventional pills, injectable medicines, biotech drugs and consumer healthcare products. Pfizer will wind down their operations over the next 18 months to five years, depending on business considerations such as the time required to transfer product manufacturing.
The company said in November it would close six research sites and trim jobs in the United States and Britain as part of its absorption of Wyeth. It then began a six-month study of how to reconfigure its manufacturing sites.
“We have a complex network of manufacturing plants, with excess capacity that is not good for costs,” Nat Ricciardi, Pfizer’s president of manufacturing, said in an interview.
Pfizer can be more competitive, both in its operations and drug pricing, by streamlining its plants and improving their processes, Ricciardi said.
“It’s not disproportionately Wyeth,” Ricciardi said, adding that many legacy Pfizer plants and employees are on the target list. Half of the plants slated for ceased operations are legacy Pfizer sites, the company said.
One of the biggest incentives for companies to merge is the ability to cut overlapping operations and employees. Pfizer said it is on track to realize total cost reductions from the deal of $4 billion to $5 billion by 2012.
Pfizer in early 2009, at the time the Wyeth deal was announced, said it expected to cut 15 percent of the combined workforce — or almost 20,000 jobs.
The company is counting on the savings to help offset expected plunging sales of its $12 billion-a-year Lipitor cholesterol fighter, which will face generic competition late next year.
The 14 plants slated to cease or cut back operations are among Pfizer’s 40 main sites for making prescription drugs.
By June, the company plans to make recommendations for facilities that make animal-health products and later this year will evaluate those that make drugs in emerging markets or nutritional products.
“We’re not announcing closures, we’re announcing exits,” Ricciardi said, citing hopes that Pfizer will be able to sell some of the plants to owners that would continue to operate them.
Although affected employees will have as long as five years to look for other jobs, Ricciardi predicted relatively few of the workforce cuts would come from attrition, given the attractiveness and good pay of the positions.
Pfizer plans to discontinue operations over the next 18 months to five years at three sites that make tablets and capsules: Caguas, Puerto Rico; Loughbeg, Ireland and Rouses Point, New York.
Another such facility will be phased out at Guayama, Puerto Rico, although it will expand its consumer healthcare operations. The company expects to reduce the size of two others, in Illertissen, Germany and Newbridge, Ireland.
Two plants that make sterile injectable drugs — in Dublin, Ireland, and Carolina, Puerto Rico — are also ending operations.
Although Pfizer is making a concerted push into sophisticated biotech drugs — medicines made in living cells rather than crafted from chemicals — the company plans to trim operations that make biotech products and vaccines. It aims to exit operations in Shanbally, Ireland and biotech manufacturing at a longtime Wyeth facility in Pearl River, New York.
Moreover, it plans to reduce operations at U.S. plants in Sanford, North Carolina and Andover, Massachusetts; and at Havant in the United Kingdom.
Consumer healthcare products will no longer be made at plants in Richmond, Virginia and Pearl River, N.Y., but consumer healthcare research will continue in Richmond, and the Pearl River site will remain a major center for vaccine research and development.
“In both Pearl River and Richmond, research and development jobs will be unaffected by the planned manufacturing exits,” Pfizer said.
Pfizer shares fell 13 cents, or 0.8 percent, to $15.98, at mid-afternoon on the New York Stock Exchange.
Reporting by Ransdell Pierson; Editing by Lisa Von Ahn, Derek Caney and Richard Chang