March 20, 2015
By Mark Terry, BioSpace.com Breaking News Staff
Basel, Switzerland-based Novartis AG announced today that it will lay off 89 employees from its Suffern, N.Y. plant over a two-week period starting June 30. This round of layoffs is the fourth phase in preparation for the plant’s closing in 2016.
In 2014 the company indicated it would cut or transfer 525 jobs from the Suffern facility, destroy the buildings and sell by off the property. Now, apparently, the facility is being marketed by a real estate agent as a pharmaceutical manufacturing facility with all of its equipment still intact.
Most recently, on March 11, the company announced several layoffs worldwide, including closing a manufacturing facility in Puerto Rico by 2019 and laying off 270 workers. Many of these changes are connected to a three-part deal with UK-based GlaxoSmithKline . In that deal, GSK bought Novartis’s vaccines business, except its flu vaccines, and created a consumer healthcare joint venture. It also sold off its oncology portfolio and related research and development activities to Novartis.
In addition, Novartis has shifted 7,000 jobs to a new Novartis Business Services group. As part of that deal, a new operations center in India with room for 8,000 employees was created. Many of the jobs involve transfers, as opposed to just cutting jobs.
So far 2015 is being marked by regular and major job cuts in the biopharma industry. One report indicates that at least 1,400 biopharma jobs have been cut since the beginning of the year in the U.S. Amgen had cut 300 jobs at the former Onyx Therapeutics facility in South San Francisco, Calif.
Roche /Genentech has cut 170 jobs at its Brisbane, Calif. location and GlaxoSmithKline has indicated it will lay off 150 people in the Philadelphia area.
On a global basis, GSK has indicated it will lay off about 1,000 people in its China operations.
This creates a great deal of uncertainty for biopharma researchers, especially as restructuring and mergers has increased in the last few years. However, it’s not all gloom and doom, for those looking for a silver lining.
“There has been a redistribution of talent and facilities from bigger companies to smaller companies and start-ups that is, in my view, having a beneficial effect on the drug discovery ecosystem,” John LaMattina wrote in a Forbes blog.
Viewing things happily for the industry as a whole is probably unlikely to appease people who are laid off and forced to look for work or change careers. Dublin, Ireland-based Shire Pharmaceuticals recently indicated it will lay off 600 people in Philadelphia. “The vast majority of those jobs are being relocated to Lexington,” said Shire spokeswoman Gwen Fisher in a statement.
There are apparently a number of reasons behind the current volatility. Some of it is related to companies changing strategy, shifting their market focus from, for example, immunology to cancer. Some of it is cost-cutting used to free-up operating margins, which may be used to focus on research, be used for another acquisition, or may have the sole strategic purpose of driving up stock prices.
“But it’s not all about the need for staying current,” John Carroll wrote recently. “Companies like Pfizer and GlaxoSmithKline are changing up organizations because they have filed to generate much excitement with their pipelines and research performance.”
BioSpace Temperature Poll
After Amgen Inc. said last week that it will close its South San Francisco facility acquired during its $10 billion buyout of Onyx Pharmaceuticals and will lay off 300 of Oynx’s 750 workers, BioSpace is wondering—will the number of mergers and acquisitions completed in 2014 mean a “streamlining” of biotech jobs in the Bay Area? Tell us your thoughts.
