AstraZeneca Pharmaceuticals announced it will cut 1,200 jobs from its corporate United States headquarters in Wilmington beginning this year.
According to AstraZeneca, the cuts are part of a global restructuring of the company to create strategic research and development centers in other locations.
“These proposals are designed to co-locate teams of scientists, discovery scientists, development scientists and commercial colleagues to improve collaboration and hopefully return AstraZeneca to growth,” explained Tony Jewell, senior director for AstraZeneca.
The company says the move wasn’t designed as a cost saving measure, but rather a way to improve scientific innovation and productivity.
“Today marks an important day in AstraZeneca’s history as we announce proposals that ensure we put science and patients at the heart of everything we do,” said AstraZeneca CEO Pascal Soriot in a video statement posted on YouTube. “We are planning major investments to create vibrate scientific centers to that will accelerate innovation by removing complexity and by tapping into important bioscience clusters.”
Approximately 1,100 positions are in R&D and 100 in global marketing.
About 300 of the Wilmington research and development employees will head to the biologics arm of the company in Gaithersburg, Maryland where the Medimmune Headquarters are located.
Another 80 will move to the company’s Waltham, Massachusetts location and more than 200 will go to other various locations.
The rest of the roughly 600 employees will be laid off.
Alan Levin, director of the Delaware Economic Development Office, said best case scenario is that those employees will get picked up by other local companies.
“In the past when they have done these types of layoffs, most of the individuals have been able to find jobs in this market so they have not had to disrupt their lives and their families lives,” said Levin. “They’ve been sucked up by other research companies in the state and in the vicinity. We certainly want to keep this talent in Delaware.”
Sen. Chris Coons vowed in a statement to help those effected by the layoffs.
“Our talented workforce has long made Delaware a destination for companies doing advanced research, and it is my hope that some of these positions will find their way back home to Delaware soon,” said Coons. “There is a wide array of innovative companies doing high-end research that could really benefit from the enormously talented scientists and researchers now looking for work.”
Congressman John Carney added that he’s confident the state can attract new STEM (Science, Technology, Engineering and Math) jobs to help make up for the loss.
“While today’s decision is a significant setback, Delaware is still well-positioned to attract highly-skilled, good-paying jobs in science, technology, and research,” said Carney in a statement. “But we must redouble our efforts to create a business climate in Delaware that is attractive to employers.”
AstraZeneca will begin phasing out positions and relocating workers beginning this year through the end of 2015.
Sen. Tom Carper helped bring the company’s U.S. headquarters to Delaware when he was governor of the first state and released a statement today expressing his disappointment.
“For years, AstraZeneca has been that good corporate citizen in Delaware, which is what makes this decision all the more painful for me and especially for those 650 men and women who will lose their jobs at the company and the additional 550 employees whose jobs will leave Delaware for other locations,” said Carper in a statement. “On one hand, we are grateful that another option – the complete closure of operations in Delaware – was averted and that 2,300 jobs will remain in Delaware along with AstraZeneca’s global headquarters. I remain hopeful that AstraZeneca can eventually overcome this adversity and find new ways to make their company more competitive in the future, but this outcome is still deeply, deeply disappointing.”
Gov. Jack Markell said the state will continue to work with the company to remain its North American headquarters.
“AstraZeneca leadership has shared its goals of restoring company growth and co-locating work teams in order to be strategically successfully, but Delaware remains home to AstraZeneca’s North American headquarters and will be a reporting base for its global innovations group,” said Markell in a statement.
Levin added that the state is hopeful the restructuring will lead to new growth in Delaware in the future.
“I think what will happen ultimately here is, they’re repositioning themselves here in Delaware, with the understanding that three years, five years, down the road, when things get better, when they have more drugs coming out of the pipeline, that they will be in a position to hopefully recommit to our state and grow the research and development center that we had here at one time,” said Levin.
After the cuts, the company will employ approximately 2,000 workers in Wilmington.
Levin said they have not yet calculated the financial impact the cuts will have on the state.
The announcement comes on the same day as the Delaware Economic and Financial Advisory Council plans to release their FY2014 revenue forecast.
AZ CEO Pascal Soriot talks about the changes in a vidoe the company posted on YouTube: