AstraZeneca to axe 7,000 jobs as revenues slump
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Your support makes all the difference.AstraZeneca has set out plans to fire another 7,350 staff, after admitting revenues would fall this year as blockbuster drugs fall out of patent and governments demand discounted deals.
Britain's second-biggest drug maker employs 8,000 people in the UK, mainly at its R&D site in Cheshire. About 300 jobs are likely to go there.
The pharma giant has culled 21,600 jobs in the last four years, but the failure of new drugs is seeing it pare back costs further, with it hoping to save just over £1bn a year by 2014 with the latest job cuts.
"This is a blow to Britain's research and development base," said Linda McCulloch of the Unite union. "If the company can afford a 10 per cent hike in its dividends, then it can afford to retain these roles."
Astra said that during 2011 it lost almost $2bn (£1.3bn) in revenues after blockbuster drugs faced generic competition. Its heartburn drug Nexium fell out of patent in Europe, and the $1.5bn-a-year cancer drug Arimidex also saw cheaper rivals enter the market. But the full impact of Astra's "patent cliff" is yet to be seen. Nexium and Seroquel, its best-selling bipolar drug, brought in combined revenues of $10.2bn last year, and both will have generic competitors in the massive US market from 2014. The drugmaker said it was also suffering from penny-pinching governments in Europe and the US cutting their drugs bill. Astra said it lost $1bn last year because of"government price interventions".
However, Astra still managed to increase revenues by 1 per cent to $33.6bn in 2011. Pre-tax profit grew 13 per cent at $12.3bn. Revenues this year are expected to fall in the "low double-digit range". David Brennan, chief executive, said: "The further expected losses of market exclusivity make for a challenging 2012 outlook." The company is starting a $4.5bn share buyback scheme and will raise its dividend by 10 per cent. The shares fell 101p, or 3.3 per cent, to 2988.5p yesterday.
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