BMS reveals plans to trim the fat
the fat and save cash, months after first revealing that big
changes would be on the cards.
Amidst sweeping restructuring plans, around 4,300 positions are facing the chop between now and 2010 - equivalent to 10 per cent of the drug behemoth's global workforce - and 1,300 employees have already received their marching orders.
The firm's back-office operations, finance, information technology and human resources departments will be hit the hardest by the intended job losses, BMS indicated.
Additionally, however, the firm is also planning to mothball over half of its 27 manufacturing facilities during the same period.
The usual move of outsourcing production to cheaper offshore locations such as Asia and Latin America will be a likely scenario, benefiting those on the receiving end, although, even these regions are still at risk of being negatively affected by the restructure - it has already been announced that a BMS site in one such low-cost location will be one of the first to close its doors.
The firm said that Bristol Laboratories International Sociedad Anónima, a secondary packaging facility in Colón, Panama, will cease operations by the middle of 2008.
Products at the site will be transferred to "other facilities" and ninety-eight positions will be affected.
"Bristol-Myers Squibb is continuing to identify ways to operate more efficiently and reduce our cost base", said Carlo de Notaristefani, president of Technical Operations.
"Focusing our manufacturing, packaging and distribution operations on fewer, specialized sites is one way we can bring greater efficiencies to our network," he said.
At the end of the restructuring tunnel, BMS is expecting to be left with a $1.5bn pot of gold, in addition to a total of around $600m already anticipated by the end of 2008 through already-announced initiatives.
The firm's cash saving plans have been prompted by soaring drug development costs and increasing generic competition that are increasingly becoming a squeeze on its financials.
The future scenario is set to worsen - BMS' number one drug Plavix will lose patent exclusivity in 2012, leaving the firm exposed to a potential $3bn/year revenue erosion.
However, BMS is by no means alone in its financial vulnerability or its axe-wielding activities.
This year several of its big pharma peers have also announced changes to the face of their business to continue to compete in a fast-changing industry that continues to exert pressure on company purse-strings.
AstraZeneca, GlaxoSmithKline, Pfizer, Merck & Co., Roche, Bayer and Abbott have all announced their own restructuring programmes.
Meanwhile, its not all cut backs at BMS.
In an earlier conference call, CEO James Cornelius said: "The challenge is to reduce costs while at the same time continue in investing in growth areas".
"With a promising R&D pipeline, we plan to invest further in R&D and the business including specialty medicines and biologics where we see tremendous growth potential."
Puerto Rico is one such region benefiting from investment in this area.
