Pharmaceutical giant Merck today said it would cut 4,400 jobs worldwide to deal with the fall in sales in arthritis drug Vioxx and a lack of new drugs coming to market. The firm plans to cut 3,200 full time positions and around 1,200 temporary staff.
Merck employs 460 people at its manufacturing plant in Ballydine, Co Tipperary and approximately another 50 sales and marketing staff. It is currently unclear whether the jobs cuts will affect the Irish operations.
A spokesperson for Merck told RTÉ OnBusiness this evening that jobs would be cut across the organisation but that at this stage he couldn't be specific as to whether there would be job cuts in Ireland.
He said, 'Communications will cascade to the various departments and regions over the next several weeks.'
After the announcement Merck's shares fell 7% to a one year low on the Dow Jones.
Merck also announced it would introduce a new drug distribution plan and said the new plan the job cuts see its full year earnings fall short of estimates.
The cuts will generate about $250m to $300m in annual savings and benefits costs.
Chief executive Raymond Gilmartin said, 'What we're doing here is anticipating the environment we see going forward. What we're doing is what has already gone on in a lot of other industries that have been in a tougher environment than we operate in.'
Merck also said it plans to implement a new drug distribution system which will limit the amount of medicines wholesalers can buy.
Today Merck announced that earnings per share from continuing operations for the third quarter of 2003 were $0.83, a 6% increase over the same period in 2002. Net income from continuing operations was $1,865m, compared to $1,767.3m in the third quarter of last year. Worldwide sales from continuing operations grew 6% for the quarter to $5.8 billion.
