Novartis to Cut 4,000 Jobs as Part of Restructuring Move
Novartis AG (NYSE:NVS) is continuing its cost cutting, this time by cutting or transferring up to 4,000 jobs, or approximately 6 percent of its workforce, according to a Reuters report Monday. Novartis, along with many competitors in the industry, has been challenged to reduce costs due to pressure from investors to restructure as patent expirations continue to sink sales of many companies best selling drugs and governments around the world try to reduce health costs.
The company’s best selling blood pressure drug, Diovan, for instance, will soon face competition from generic manufacturer Ranbaxy Laboratories, as soon as the regulatory delays for the generic version are surpassed. The company was hoping to win approval for a number new drugs this year, including serelaxin, a heart failure drug, which has since failed to win approval in Europe, and secukinumab, a treatment for moderate to severe plaque psoriasis, which has yet to be reviewed.
Spokesman Eric Althoff said the measures “reflect the need to respond to a dynamically changing healthcare environment” and that he expects that “an equal number of jobs will be created as are reduced.” Althoff also emphasized that that Novartis’ intention is to prioritize; the company wants to reallocate its resources in order to focus on planned product launches and other growth areas.