Drug maker AstraZeneca to cut 1,500 jobs in US


AstraZeneca PLC will reduce its U.S. sales force by 24%, citing a "challenging environment" and continuing an overall contraction in drug-industry sales organizations.

Drug makers have shed thousands of sales representatives in the U.S. in recent years in response to generic competition for top products and growing resistance among doctors to sales calls. ZS Associates, a pharmaceutical consultant, has predicted the U.S. industry sales force will decline to about 65,000 over the next two years, from a peak of about 104,000 in 2006.

U.K.-based AstraZeneca said it will cut its U.S. sales force by about 1,150 leadership and sales-representative positions. Globally, AstraZeneca has about 61,000 employees, with 14,000 in North America.

"These changes are driven by the need to effectively compete in a challenging environment," said AstraZeneca spokesman Tony Jewell.

The company faces the loss of U.S. patent protection in coming years for top-selling drugs including heartburn treatment Nexium, cholesterol-lowering pill Crestor and antipsychotic Seroquel.

AstraZeneca said the reduction was in addition to a prior restructuring program involving thousands of job cuts because of expectations for sliding profit and revenue-growth challenges. Wednesday's U.S. sales-force cuts are also in addition to previously announced efficiency plans in the company's U.S. business.

Rich Fante, president of AstraZeneca U.S., said the changes would help the company to deliver better results.

So far this year, AstraZeneca performed well overall, given its warnings for a challenging year, prompting it to raise its full-year earnings guidance in October. However, it has continued to warn that the second half would be more difficult than the first because of generic-drug competition and removal of some temporary benefits, making for tough comparisons.

On Wednesday, the company said the U.S. sales-force layoffs would vary by geography and selling teams. Workers will have the option to step forward to potentially leave the company, and all decisions will be finalized by early February 2012. The company predicted it would take a restructuring charge of $50 million to $100 million in the current quarter resulting from the layoffs.

Source: WSJ