Merck to lay off 13,000 workers

The New Jersey-based pharmaceutical giant Merck & Co. will lay off 13,000 employees by 2015, despite high sales and profits last quarter.

 

More than 5,000 of those lost jobs will be U.S. positions. The company, headquartered in Whitehouse Station, N.J., employs about 12,000 people at two complexes in suburban Philadelphia and about 91,000 worldwide.

Profits on Merck’s No. 1 seller, asthma drug Singulair, will be slashed next year when the company’s patent expires.

Albert Wertheimer, a Temple University pharmacy professor, said many companies are laying off workers as big blockbuster drugs lose patent protection in the next few years.

“What that means is within six months, there’ll be 10 or 12 or 15 companies making a generic version of those products,” Wertheimer said. “The originator company will lose probably close to 90 percent of the market on each one of those.”

A spokesman for Merck said the layoffs will be concentrated in administrative and headquarters-related positions in developed nations. The company will continue hiring in developing countries. He would not say how hard hit local employees would be, but said the company has started to notify workers of the layoffs to begin later this year.

Wertheimer said the layoffs at Merck and other pharmaceutical companies worry him. He is concerned that quality-control issues that have plagued Johnson & Johnson and led to dozens of recalls will spread to other companies as they try to cut costs.

“We have a bunch of youngsters doing some of the functions that people who had 20 years of experience … were doing,” Wertheimer said. “So I think we’re going to find some of these same snafus taking place at other well-regarded companies, only because they’re trying to stretch their human resources too much.”