Layoffs are always big news in pharma, as they are seen as an indicator of the health of the industry. Companies don’t like to have to announce them, but when they decide to, getting plenty of attention becomes important. That is to impress upon investors that their CEOs are making the hard decisions needed to keep costs in line. Of course employees are interested. They know from the inside what is about to happen, and having lived through the awful anticipation, they want to see what the carnage is really going to be.
The patent cliff is often the big culprit. One might think that a one-to-one relationship could be graphed between what is happening with the patent cliff and layoffs, but that is not the case. Pharma analysis company EvaluatePharma has forecast that there were $41 billion in patent sales at risk in 2011, a year in which the top 10 pharma layoffs amounted to 26,500. In 2012, the peak year, EvalutePharma said a whopping $67 billion was at risk. In that year, the top layoffs tallied more than 34,600. Then in 2013, when at-risk sales fell to only $29 billion, we have a total for the top 10 of nearly 27,900.
Of course, the factors that eventually lead to layoffs are not simple. Some companies try to get ahead of the curve with cuts. Eli Lilly ($LLY) is an example of that for 2013. Sometimes they cut and then have to cut more because the pipeline is not hitting. Merck ($MRK) comes to mind, having announced its fourth wave of major cuts in four years during 2013.
Chosen excerpts by Job Market Monitor. Read the whole story at
via The top 10 largest pharma layoffs in 2013 – FiercePharma.
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