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AZN Cuts 7,600 Jobs (~10% of Workforce)

http://www.reuters.com/article/marketsNews/idUKL2679647220070726?rpc=44

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Thu Jul 26, 2007 6:37AM EDT

LONDON, July 26 (Reuters) - AstraZeneca Plc (AZN) plans to axe around 7,600 jobs as part of an expanded cost-cutting drive, it said on Thursday as it posted a 17 percent rise in underlying quarterly earnings and nudged up its 2007 guidance.

The Anglo-Swedish drugmaker, which said it February it planned to cut about 3,000 positions, said it would now shed more than 10 percent of its 2006 workforce in a drive to make over $900 million of annual savings by 2010.

Chief Executive David Brennan said the additional job losses would affect its European sales and marketing team as well as employees working in disease areas and regulatory affairs.

The cost of the restructuring will be $1.6 billion.

Second-quarter earnings per share excluding restructuring costs and expenses related to its recent acquisition of MedImmune totalled $1.19, on sales up 10 percent at $7.27 billion. Including these costs, however, earnings fell 7 percent to 95 cents a share.

AstraZeneca also nudged up 2007 underlying earnings forecast to between $3.90 and $4.05 from $3.80 to $4.05 previously.

At 1030 GMT, AstraZeneca shares were up 1.1 percent at 2,706 pence.

The London-based group has embarked on an aggressive programme of acquisitions to rebuild its pipeline, following a series of late-stage product setbacks, while at the same time restructuring manufacturing to save costs.

AstraZeneca's stock has been under pressure due to its weak pipeline and a poorly received deal to buy U.S.-based MedImmune in April. But the shares have gained ground in the past month and now trade on 12.8 times forecast 2008 earnings, a 12 percent discount to the European sector.
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