AstraZeneca announces 2,200 R&D job cuts worldwide
2 February 2012
AstraZeneca has announced a set of new restructuring initiatives along with its full-year 2011 results today. The programme is expected to lead to 7,300 job losses in total, with 2,200 of those R&D.
The present restructuring initiative, which started in 2007, is aimed at saving $1.6bn annually by end of 2014 at a cost of $2.1bn.
David Brennan, Chief Executive Officer, AstraZeneca said: “AstraZeneca remains fully committed to our long-term, focused, innovation-driven biopharmaceutical strategy. Since 2007, when we announced our first major restructuring programme, we have taken decisive steps to improve returns on investment, recognising that this demands concerted, enterprise-wide action.
Today’s initiatives should be seen in this strategic context as we continue to reshape our business to improve productivity and innovation and with it our long-term ability to compete in a rapidly changing healthcare environment. “We are acutely aware that these decisions will affect many employees and we will strive to support our people as we implement these changes.”
The R&D function will accelerate its transformation, which the company unveiled in January 2010. The company closed a research facility at Charnwood near Loughborough last year, although some good news came out of that when some of those staff set up new biotechnology companies at BioCity Nottingham.
The company says the new programme announced today will create a simpler and more innovative R&D organization with a lower and more flexible cost base. Excess capacity in certain R&D functions will be reduced, matching resources to AstraZeneca’s more focused R&D portfolio.
A focus for much of the change in R&D is the neuroscience therapy area. While the patient need for better medicines in neuroscience is huge and the science is promising, advances in treatments have proved elusive for the pharmaceutical industry in recent years, despite significant investment. AstraZeneca believes that it will have the best chance of success in future by combining the company’s internal expertise with innovative external science.
As a result, AstraZeneca says it will create a new “virtual” neuroscience Innovative Medicines unit (iMed) made up of a small team of around 40 to 50 AstraZeneca scientists conducting discovery and development externally, through a network of some of the most innovative partners in academia and industry globally. The team will be based in major neuroscience hubs — Boston (US) and Cambridge (UK) — and work closely with innovative partners such as the Karolinska Institute in Stockholm (Sweden).
Martin Mackay, President of Research and Development, AstraZeneca, said: “We’ve made an active choice to stay in neuroscience though we will work very differently to share cost, risk and reward with partners in this especially challenging but important field of medical research. The creation of a virtual neuroscience iMed will make us more agile scientifically and financially – we will be able to collaborate flexibly with the best scientific expertise, wherever it exists in the world.”
The implementation of this new model will lead to a significant reduction in employee numbers and the end of R&D activity at two sites that are focused on neuroscience: Södertälje in Sweden and Montreal in Canada. As the location of the company’s largest manufacturing site, and the base of the commercial business covering the Scandinavian markets, Södertälje remains an important part of the AstraZeneca network. The company’s Montreal facility will close.
AstraZeneca says it will continue to invest in R&D in the following therapy areas: cardiovascular, gastrointestinal, infection, oncology, neuroscience and respiratory & inflammation.
In the Selling, General and Administrative (SG&A) areas there will be about 3,750 job losses, due to "simplification of the company's global commercial organisation structure". New customer channels, which include digital technology and the use of call centres for sales and medical advice, have been successfully established in many developed markets and are now being deployed around the world.
The new programme will drive further efficiency in the supply chain, with a particular focus on support functions in Operations, with job losses of about 1,350.