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Pfizer Overhaul Continues
 
 
  "Thousands more jobs may go as Pfizer rethinks strategy"
 
16/01/2007
www.pharmatimes.com
 
Pfizer is getting ready to announce a major overhaul of its development and sales operations which could lead to thousands more jobs being lost, according to the Wall Street Journal.
 
The newspaper says that Pfizer's chief executive Jeffrey Kindler will outline his vision for the New York-based giant's future to analysts next Monday and cites people close to the situation as saying that employees are bracing themselves for deep cutbacks across the group, more than Pfizer has previously announced.
 
The job losses will run into the thousands and the WSJ claims that the firm's European sales force will be hard hit and "there will be facilities closures." Manufacturing expenses will be cut dramatically and there is unlikely to be any increase in the firm's R&D spend. Pfizer has not commented on the article.
 
Mr Kindler, who replaced Hank McKinnell as CEO in the summer of last year, has regularly warned of the need for Pfizer to change its business strategies, and in November announced that Pfizer was reducing its US sales force by about 20%, or around 2,200 jobs, to "match the organisation's business needs." A month earlier, the company had promised to undertake a comprehensive review of every aspect of its operations "with the goals of being more agile, effective and capable."
 
The nature of this review was likely affected by the abrupt termination of Pfizer's high-density lipoprotein booster torcetrapib at the end of last year, news which wiped over $21 billion off the value of the firm and lead observers to muse about how the company was going to plug the gaping hole in its pipeline. A major acquisition was mentioned as a possibility but the forthcoming review suggests that spending billions more may not be on the agenda.
 
"Pfizer's Strategy Takes Shape'
 
Europe Sales Team
May Be Cut Deeply;
Reorganizing R&D

 
Wall St Jnl
By AVERY JOHNSON and JOANN S. LUBLIN
January 16, 2007
 
As new Pfizer Inc. chief Jeffrey B. Kindler prepares to give the first details on his strategic vision for the company, his plan is likely to involve shedding more jobs and rethinking the way the drug giant develops, makes and markets medicines.
 
Employees at the world's largest drug maker are bracing for deep cutbacks when Mr. Kindler presents analysts with some specifics on his plan to overhaul Pfizer on Monday, say people close to the situation. The job cuts could involve several thousand positions, these people say, including some in the European sales force. Mr. Kindler recently reshuffled some senior managers for the second time since taking the top job in July.
 
Mr. Kindler hasn't finalized a number of his decisions, and could change his mind about others in the week before making his presentation. Nonetheless, the new leadership is committed to a cost-cutting plan, these people say.
 
Pfizer spokesman Andy McCormick wouldn't comment on the company's plans.
 
Pfizer's new chairman and chief executive is seeking to put his stamp on the company at a challenging time, and has made sweeping but general statements since taking over that he would recognize no sacred cows as he restructures operations. His pronouncements Monday will be scrutinized closely by competitors suffering from similar woes, albeit on a smaller scale.
 
The changes in the works follow a general announcement by Pfizer in October that it would reduce costs above and beyond a previous plan to cut $4 billion in expenses, put into place by Mr. Kindler's predecessor, Henry "Hank" McKinnell.
 
Mr. Kindler won the top job in part based on his status as a relative outsider: He is a lawyer, not a scientist, and has been at Pfizer for only five years. The new chief hasn't sat on a corporate board before, and fellow Pfizer directors are encouraging him to take an outside seat around his first anniversary as chief executive at Pfizer.
 
Despite his relative inexperience in the corner office, Mr. Kindler has won high marks from the board for his boldness, speed of action and frequent communication with directors, says someone familiar with the situation.
 
Mr. Kindler has been mostly silent about his strategic plans since starting his job nearly six months ago. But he has been busy -- reshuffling much of his senior team, cutting the U.S. sales force by 20% and raising the company's dividend 21% to placate restless shareholders. He has come across as likeable and accessible with Wall Street, and has pacified critics of the company's transparency by putting its drug pipeline online.
 
His is continuing to make changes. Recently he replaced Sylvia Montero, a longtime employee who had been head of human resources and a member of the newly appointed executive team, with Mary McLeod, from Korn Consulting, who will act as interim head of human resources. People familiar with the situation say Mr. Kindler is tapping Korn to help him rework the company's culture and aid in its transformation.
 
Another departure was Declan Doogan, world-wide head of drug development, who left last month. Pfizer confirmed both the changes.
 
Mr. Kindler's emerging strategy appears to be to contain spending by keeping research-and-development costs flat, while cutting other costs -- including marketing and manufacturing -- rather dramatically, say people familiar with the situation. Deep cuts could hit the company's European sales force, following the reduction made to the U.S. sales staff in November. In addition, "there will be facilities closures," said one person close to the situation.
 
Pfizer recently was forced to halt study of its cholesterol drug torceptrapib after some patients died. The drug had been Pfizer's hope to replace sales lost when its best-selling Lipitor -- with its roughly $12 billion in 2005 sales -- faces generic competition as soon as 2010.
 
Now Mr. Kindler is looking for ways to hold R&D more accountable and is looking at reorganizing the company's scientists into smaller units by disease area, says someone familiar with the situation. Mr. McKinnell began a process of streamlining R&D by organizing it into 11 therapeutic areas.
 
"I'd most like to see new drugs, but if he's able to revive the pipeline and R&D productivity, it'll take years. I'm sure he'll talk about it, but it's not much more than a promise," said Michael Krensavage, an analyst at Raymond James. "He's handcuffed to cutting costs. It'll be very difficult to change the direction of the iceberg with one meeting."
 
 
 
 
 
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