Merck will reduce its staff by approximately 6,000 in “some areas of our global workforce,” the New Jersey drugmaker told Fierce Pharma. The cuts will affect 8% of the company's headcount.
Word of the dismissals comes two days after Merck revealed a sweeping cost-cutting effort designed to save $3 billion annually by the end of 2027.
“We will do our best to ensure that colleagues have the opportunity to be trained to take new positions,” Merck added in a brief statement Thursday.
The company did not say which employees would be laid off or whether any facility closures are expected, though Tuesday, during its quarterly presentation, Merck said it will “reduce its global real estate footprint."
On Thursday, Merck added that it "will continue to optimize its manufacturing network by aligning the geography of its global operations with its customers, consistently evaluating its manufacturing to ensure medicines and vaccines are produced and distributed close to the communities and patients it serves."
The company also said Tuesday that it was eliminating designated administrative, sales and R&D positions, adding that it also will “hire employees into new roles across strategic growth areas of the business.”
The changes are necessary as the company will undergo massive transformation with biosimilar competition coming for Keytruda, likely starting in 2028 in the U.S. Second-quarter sales results illustrated the company’s dependence on the cancer superstar. For the first time ever, Keytruda’s quarterly sales, at $8 billion, accounted for more than half of the company’s revenue, which came to $15.8 billion for the period.
The company also is dealing with a sudden free fall in sales of HPV vaccine Gardasil, which tumbled to $1.1 billion in the second quarter, down from $2.48 billion the same period last year. Chief Financial Officer Caroline Litchfield said demand in China remains “soft” and that the company will not ship further product this year.
Merck isn’t the only Big Pharma company undergoing a significant cost-cutting effort. Over the last two years, Bayer has reduced its head count by more than 11,000 under an initiative designed to save 2 billion euros ($2.3 billion) through 2026.
Bristol Myers Squibb has launched a “strategic productivity initiative,” which will slash $2 billion in costs through 2027. In April, Pfizer upped the ante on its cost-cutting program, aiming to save $7.7 billion through 2027.