US pharmaceutical giant Merck said today it would cut an additional 8,500 jobs worldwide as it seeks to cut costs by USD 2.5 billion by the end of 2015.
The new job cuts, combined with previously announced cuts of about 7,500, will slash 20 per cent of the current global workforce of 81,000 by end-2015, Merck said in a statement.
The company, which has been under pressure after the expiration of patents on some key drugs, said that most of the savings will come from marketing and administrative expenses, and research and development (R&D).
Merck said it expected to achieve USD 1.0 billion, or 40 per cent of the targeted savings, by the end of next year.
"These actions will make Merck a more competitive company, better positioned to drive innovation and to more effectively commercialise medicines and vaccines for the people who need them," said Kenneth Frazier, Merck chairman and chief executive, in the statement.
Frazier emphasised the company was committed to improving performance in the short term while also investing for the long term to create value for patients, customers and shareholders.
The multi-yearn restructuring is aimed at sharpening the company's commercial and R&D focus, including boosting the drug development pipeline and creating a more flexible cost structure.
Resources will be directed to areas with the highest potential for growth, such as the anti-PD-1 immunotherapy program for oncology, the company said, while maintaining a focus on its core pharmaceutical and vaccine business.
Total pre-tax costs for the overhaul were estimated between USD 2.5 billion and USD 3.0 billion.
The company planned to take charges for the new restructuring program of USD 900 million to USD 1.1 billion in 2013, most of them in the third quarter.
Merck, based in Whitehouse Station, New Jersey, said it would increase its focus in 10 markets that account for the majority of revenue in its core business -- the US, Brazil, Britain, Canada, China, France, Germany, Japan, Russia and South Korea.
The company confirmed its full-year 2013 earnings forecast, with earnings per share in a target range of USD 3.45 to USD