AstraZeneca to axe jobs despite profit rise

AFP/The Local
AFP/The Local - [email protected]
AstraZeneca to axe jobs despite profit rise

Anglo-Swedish drugmaker AstraZeneca plans to slash 8,000 more jobs worldwide by 2014, continuing its efforts to cut costs despite rising profits, the company announced on Thursday.


"Today we have proposed a further reduction in headcount of 8,000," a spokeswoman told AFP. The news came as AstraZeneca announced that net profits soared by almost one quarter in 2009.

AstraZeneca said it hoped to deliver annual cost savings of $1.9 billion over the next four years, in an extension of a restructuring programme launched in 2007 that has so far cost 12,600 jobs.

"We started three years ago our productivity initiative to seek to create sustainable long term competitiveness for AstraZeneca in a rapidly changing environment," the spokeswoman added.

The latest job cuts will affect the group's sales and marketing division, as well as its business infrastructure and research and development units.

The company, which has 63,000 staff around the world, added that "keeping our employees informed remains our priority and we will consult fully with them on any proposed changes."

AstraZeneca also announced that its net profit jumped 24 percent to $7.52 billion last year, boosted by rising sales of cholesterol treatment Crestor and government orders for its swine flu vaccines and medications.

Revenues grew four percent to $32.8 billion in 2009 -- but Astra forecast that sales would decline this year bin a "mid- to single-digit" drop.

The firm predicts a tough 2010 because a number of its key drugs patents are due to expire.

Pharmaceutical companies usually face fierce competition from generic drugmakers when they lose patents to produce key drugs.

Next year, AstraZeneca will face generic competition to asthma medication Pulmicort and breast cancer drug Arimidex in the United States.

"Let's be clear -- 2010 is going to be a challenging year," Chief Executive David Brennan said.

The restructuring was "not just about cost reduction" and the group hoped to create jobs elsewhere, he said.

In late afternoon trade, the group's share price fell 4.76 percent to 2,900 pence on London's FTSE 100 index of leading shares, which was 0.72 percent lower at 5,179.82 points.

"AstraZeneca's results undershot analyst expectations," said CMC Markets analyst Michael Hewson.

"The shares were also hit as it predicted 2010 revenues would be hit by the loss of exclusive rights to sell certain drugs."

AstraZeneca, Britain's second biggest drugmaker by sales after market leader GlaxoSmithKline, has operations stretching across more than 100 countries around the globe.


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