Merck to slash 7,200 jobs; Q3 profit falls 28 pc

NEW YORK: Pharma major Merck & Co on Wednesday said it will slash 7,200 jobs, which account for more than 12 per cent of the drug maker's global workforce, as part of restructuring efforts.

The company today also reported a 28 per cent decline in its net income at $1.09 billion for the third quarter ended September 30 as compared to the year-ago period.

Merck had a net income of $1.53 billion in the corresponding period a year ago.

"As part of the 2008 restructuring plan, Merck expects to eliminate approximately 7,200 positions - 6,800 active employees and 400 vacancies - across all areas of the company worldwide by the end of 2011. About 40 per cent of the total reductions will occur in the United States," the company said in a statement.

The firm had about 56,700 employees as of September 30. Further, to streamline management layers in the firm, Merck would reduce its total number of senior and mid-level executives by about 25 per cent.

"These positions are in addition to the 10,400 positions eliminated as part of the 2005 restructuring program, which was substantially completed at the end of September 2008.

Meanwhile, for the third quarter, Merck's worldwide sales declined two per cent to $5.9 billion, as compared to the corresponding period a year ago.

"... our current sales trends for key products, compounded by known industry and emerging economic factors, have led us to reassess the environment in which we expect to be operating between now and 2010.

In light of these considerations, we have revised our financial guidance over this time period," Merck Chairman, President and Chief Executive Richard T Clark said.