Pfizer Hints That German Policy Helped Drive 500 Job Cuts
Sep 17th 2011 11:46AM
Updated Sep 17th 2011 11:48AM
Pfizer (NYS: PFE) is cutting more than 500 jobs in Germany, amounting to one in eight of the company's workforce there, Handelsblatt is reporting. And in a story that's familiar after several years of sales layoffs, drug reps will bear the brunt of the cuts, although administrative functions will be hit, too.
The job cuts are part of Pfizer's previously announced global restructuring, which is intended to claim more than 20,000 jobs and save billions annually. Some of the cuts came from the integration of Wyeth, which Pfizer bought in 2009; some have been aimed at reducing R&D spending.
And some have stemmed from a shift toward smaller sales forces supporting more specialized drugs -- and a shift away from the huge armies of reps that once promoted mass-market blockbusters, such as the best-selling Lipitor, which faces generic competition in November. Most of the German cuts will come in Pfizer's primary-care operations, Handelsblatt states.
But Germans are wondering whether the cuts in were inspired, at least in part, by the government's new austerity plans for drug spending -- something Pfizer is hinting at. Pfizer's pain drug Lyrica is expected to face a price cap, for instance, and new drugs will have to prove themselves better than existing treatments during their first year on the market or face government-imposed prices. As a Pfizer spokesman said, as quoted by The Local, "The health care policy environment has clearly clouded the expectations for future business."
At the time this article was published Motley Fool newsletter services have recommended buying shares of Pfizer. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
Copyright © 1995 - 2011 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.