The drug maker Merck & Co said on Monday that it will cut about 7 000 jobs, or 11% of its work force, by the end of 2008 and will close or sell five of its 31 manufacturing plants in moves that it says will save up to $4-billion.
The move comes as the company, based in Whitehouse Station, New Jersey, faces the loss of patent protection for its top-selling cholesterol drug Zocor in 2006 as well as thousands of liability lawsuits from its recalled painkiller Vioxx.
It employs just less than 63 000 people. Last month, Merck cut 825 jobs worldwide.
Restructuring costs are expected to be from $350-million to $400-million in 2005 and $800-million to $1-billion in 2006, and result in pretax savings of $3,5-billion to $4-billion from 2006 to 2010.
Merck reiterated its 2005 earnings-per-share forecast of $2,47 to $2,51, or $2,04 to $2,10 with one-time charges. For 2006, the company forecast earnings per share of $2,28 to $2,36 excluding restructuring charges, or $1,98 to $2,12 with one-time charges.
Analysts surveyed by Thomson Financial expect earnings per share of $2,50 in 2005 and $2,38 in 2006. — Sapa-AP