The year 2011 witnessed tens of thousands job cuts from big pharmaceutical companies, such as Merck, Pfizer and AstraZeneca; however, the industry as whole is no longer at the top of lay off charts.

pharma job cuts

The annual job losses in pharmaceutical industry by November this year are about 20,000, less than half of last year’s 50K figure, according to the latest data from Challenger, Gray and Christmas, an outplacement consulting firm. The pharmaceutical industry ranked the sixth on the annual job-cut chart below government, financial, retailing, Aerospace/Defense and health care sectors. In comparison, the pharma sector last year was  the second-highest area of  job cuts on the chart following the government.

The job losses in pharmaceutical sector had a surge in July, when it topped all other sectors with 13,493 job cuts. The burst of job losses could be attributed to Merck’s announced 13,000 layoffs, which are the result of a restructuring practice that started after the drug maker’s merger with Schering-Plough. The company said it expects to reduce its global workforce of 91,000 by an extra 12 to 13 per cent before the end of 2015. The job cuts will mostly be done in western markets related jobs. The New York-based company says it will continue to hire new employees in strategic growth areas of the business such as emerging markets. In December this year, Merck said it planned a new Asian R&D center in Beijing as part of $1.5 billion investment in the region.

Another New York-based pharma company Pfizer also made a job cut of 2,400 when it closed its R&D facility in Kent, England. The company said the closure is part of its plans to refine the R&D programme. Among those affected by the job cuts, several hundred of the employees would have the chance to transfer to other sites or affiliate companies. The largest drug maker in the world had said previously it planned job losses of 6,000 worldwide before the end of 2015.

The Swiss pharma Novartis has made 2,000 job cuts, mostly in Switzerland and the U.S. The drugmaker closed three facilities in Italy and Switzerland to shift the company’s focus on the emerging markets.

The London-based AstraZeneca said earlier this month the company will cut 1,150 of its U.S. sales representatives and managers by February 2012, these are on top of the  400 U.S.-based job cuts announced in early October. The company’s ongoing plan is to eliminate 8,000 jobs over the next several years as a result of a worldwide restructuring program.

The downsizings in the pharmaceutical sector were largely seen as the results of economic slowing down, soaring R&D costs, low productive development pipelines.  Huge amount of money injected into new drug research and development did not generate sufficient return of interest for the industry. 

The pharma industry is facing the strategy shift as the areas of potential growth of business are changing, that eventually will lead to different composition of workforce in terms of function and geometry.  The slowing down of the job losses in the pharma section may not necessarily improve the job market in the U.S. and Eurepe  anytime soon, especially for people working in R&D section.