Job losses continue as 5,500

News today reports that Eli Lilly & Co. is planning to cut 5500 jobs over the next two years as the firm seeks to cut costs and bring new drugs to market more quickly as its bestsellers go off-patent.

The move will see the Indianapolis-based firm reducing its workforce by as much as 14 percent - to 35,000 - by the end of 2011. However, that total excludes hiring in high-growth emerging markets and in Japan.

But Eli Lilly is not alone. In fact, the nation’s pharmaceutical industry announced more than twice as many job cuts through August of this year as it did during the same period in 2008, at least according to a study from outplacement firm Challenger, Gray and Christmas.

According to the study, the number of cuts in 2009 now totals 53,000 jobs, which is significantly more than the 24,880 that were cut last year; and major cuts have now been announced not just at Eli Lilly, but at world number one Pfizer, and Merck & Co.

In the case of Pfizer, the firm is cutting 19,000 jobs as part of its acquisition of Wyeth, while Merck is cutting 16,000 jobs as part of its merger with Schering-Plough.

Today's news from Eli Lilly sees the firm hoping to cut annual costs by $1 billion per year as the firm plans to restructure itself into five new units - cancer; diabetes; established markets; emerging markets; and Elanco, its animal health business.

The company also hopes to make some cuts through retirements and attrition, but will not confirm a number.

According to plans to help achieve the goal of faster delivery of drugs to patients, the company will establish a Development Center of Excellence to streamline and accelerate late-stage development of new medicines, and this move is bolstered by both the decision to restructure itself into the five business units listed above, as well as its plans to significantly reduce its cost structure by the end of 2011.

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