Biotech Values

[DewDiligence]

Novartis to Cut 2,500 Jobs

[This move was telegraphed three days ago when CEO, Dan Vasella, spoke to the WSJ (#msg-25181446). The 2,500 jobs (2.5% of NVS’ worldwide workforce) are in addition to the 1,300-job reduction announced earlier this year. NVS’ own PR can be read at
http://cws.huginonline.com/N/134323/PR/200712/1175700_5_2.html .]

http://www.reuters.com/article/marketsNews/idUKL1361563020071213

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Thu Dec 13, 2007 1:22am EST

ZURICH, Dec 13 (Reuters) - Swiss drugmaker Novartis AG (NVS) announced a deep restructuring plan on Thursday, slashing 2,500 jobs, or 2.5 percent of its global workforce, aiming for annual savings of $1.6 billion in 2010.

Novartis said it would take a charge of $450 million in the fourth quarter for the measures, which aim to combat price pressures on drugs, higher research costs, tighter regulations and more generic competition.

The cuts come just two months after Novartis revamped its U.S. drugs business, cutting 1,260 jobs to help generate annual savings of $230 million.

The new restructuring plan is an effort to bolster investor confidence after Novartis suffered a series of setbacks this year, tarnishing what should have been a bumper year for the launch of new blockbusters.

Key diabetes drug Galvus has been delayed because of safety concerns and Novartis also cut its full-year outlook after withdrawing Zelnorm from U.S. shelves in March.
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