June 15, 2015
By Mark Terry, BioSpace.com Breaking News Staff
Zoetis , a spinoff of Pfizer Inc. , filed a WARN notice with the State of New Jersey last week indicating it planned to cut about 165 jobs by Dec. 31, 2016.
WARN notices are part of the Worker Adjustment and Retraining Notification Act of 1989.
Zoetis is one of the largest developers and manufacturers of animal health medications and vaccines in the world with annual revenue in 2014 of $4.8 billion. It employs about 10,000 people worldwide and sells products in more than 120 countries.
The job cuts will take place at world headquarters in Florham Park, N.J.
“This anticipated reduction is part of a comprehensive program announced on May 5, 2015, to simplify Zoetis operations worldwide, improve our cost structure and better allocate resources to key growth opportunities,” said Elinore White, company spokeswoman in a statement. “The implementation of this plan will allow Zoetis to become more competitive by being more focused and cost-efficient, while taking full advantage of our company’s scale and business model.”
The initiative is projected to increase profit by $200 million by 2017. It was announced on May 5 during the company’s first quarter report.
“For the past two years, our focus has been on delivering our operating and financial targets, while successfully establishing Zoetis as a standalone company,” said Juan Ramón Alexi, Zoetis chief executive officer in a statement.
“Now having entered the final stage of our stand-up projects and building on the strong momentum in our business, we are announcing plans to further improve our operations and better position Zoetis to drive long-term profitable growth. The implementation of our plans will allow us to become more competitive by being more focused and cost-efficient, while taking full advantage of our scale and business model.”
The plan calls for increased focus on key products, key markets and strategic manufacturing sites, cutting about 5,000 lower-revenue, lower-margin product SKUs, and reorganizing the company’s supply network. That includes plans to sell or exit 10 manufacturing sites over the long term.
Last November there was speculation that Zoetis might be an acquisition target of Canadian company Valeant Pharmaceuticals International, Inc. and New York-based Pershing Square Capital Management. Pershing had acquired 8.5 percent of Zetas stock. Analysts also speculated Pershing might force a sale of Zoetis to Bayer AG , Merck & Co. , or Eli Lilly and Company . So far, there doesn’t appear to be any movement in that direction.
Zoetis’ reorganization also calls for streamlining corporate functions and cutting general and administrative costs, reducing management layers while refocusing its research and development efforts on a smaller portfolio of products that nonetheless would provide higher returns.
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