Business

Merck & Co cutting a further 12,000 to 13,000 jobs

Merck logo at the firm's headquarters in New Jersey
Image caption Merck is continuing to streamline following its 2009 purchase of rival Schering Plough

US drugmaker Merck & Co is to cut a further 12,000 to 13,000 jobs by 2013, despite announcing quarterly profits of $2bn (£1.2bn).

The planned workforce reduction comes as Merck seeks to find an extra $1.5bn in annual cost savings.

The cuts will equate to between 13% and 14% of its current 91,000 global workforce.

Merck had already shed 12,500 positions in 2010, at the same time as it created 6,000 new jobs.

The company is continuing to streamline its business following its 2009 purchase of US rival Schering Plough for $41bn.

'Difficult actions'

Merck made a net profit of $2bn in the three months to 30 June, compared with $752m a year earlier, when it was hit by a one-off restructuring charge related to the Schering Plough purchase.

Its quarterly revenues were up 7% to $12.5bn.

Merck chief executive Kenneth Frazier said: "Merck is taking these difficult actions so that we can grow profitably and continue to deliver on our mission well into the future.

"The environment we operate in is changing rapidly and dramatically, and these steps will help us more efficiently serve customers and patients around the world."

Analyst Damien Conover, of investment research group Morningstar, said he expected other drugmakers to expand their own cost-cutting work.

"We have to remember that 10 years ago these firms were extremely bloated and in an entirely different operating mould, and it's really shifted to one where you don't need the gigantic sales forces that you once needed," he added.

New Jersey-based Merck & Co should not be confused with its German chemicals and pharmaceuticals namesake, Merck KGaA.

Although the two firms share the same historic roots, they are separate companies.

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