TRENTON, N.J. (AP) — Struggling Anglo-Swedish drugmaker AstraZeneca PLC said Monday that it will eliminate 1,600 jobs, mostly in the U.S. and United Kingdom, as its new CEO starts a major research and development reorganization.
The cuts, meant to reduce costs and make research programs more productive, come just weeks after the company reported big drops in revenue and net income for 2012 and forecast continuing difficulties as generic competition hurts sales.
The job reductions amount to nearly 3 percent of AstraZeneca’s 57,200 workers worldwide and are part of moves affecting several major AstraZeneca sites in the UK, US and Sweden.
Even the global headquarters will be shifted, from London to Cambridge, England, as the company moves many of its scientists near top centers for bioscience research. Rivals have been doing the same, to be near those talent pools and to increase collaborations with scientists at universities and small biotech companies.
The changes, to be made between now and 2016, are expected to produce annual savings of about $190 million by then. They’ll result in restructuring charges of $1.4 billion, about $800 million of that likely in cash.
“Given the limited financial benefits, this deal is really about improving science, and the ability to capture innovation and recruit top-tier scientists,” Citigroup analyst Mark Dainty wrote to investors. “The pay-off is likely to take several years to be realized but is evidence of sensible organizational change, in our view.”
In the U.S., AstraZeneca will scale back its site in Wilmington, Del., by about 1,200 jobs. That includes eliminating 650 positions and shifting 300 others as key functions are transferred to Gaithersburg, Md., home to AstraZeneca’s MedImmune subsidiary and research on biologic drugs — injected medicines produced in living cells rather than by mixing chemicals.
AstraZeneca’s global medicines development group, which oversees research on both pills and injectable biologic drugs, will move from Wilmington to Gaithersburg, as will the global marketing staff and and U.S. sales staff for specialty drugs. Those are complex, very expensive injected medicines for chronic conditions.