Novartis Plans to Cut 2,000 Jobs

October 25 00:00 2011

New York, October 25 (RainbowNewsLine.com) – As different governments are exerting pressure on drug makers to reduce drug prices so that they can bring down health budgets, Novartis AG, Swiss pharmaceutical giant said Tuesday that it will slash 2,000 jobs. This move comes as the company has posted a 7 percent growth in third quarter net profit on Tuesday.

Novartis said that it will cut 1,100 jobs in Switzerland and 900 jobs in the US. However, it will create 700 new positions in low-cost countries like India and China, resulting in a net loss of 1,300 jobs.
Chief Executive Joseph Jimenez told reporters in a conference call that “the health care industry is facing a difficult external environment. The financial crisis has become a debt crisis and you’ve got governments around the world that are pushing down prices of pharmaceuticals and other health care products.”

By late morning on the Zurich exchange, Novartis shares dropped 2 percent to 50.75 Swiss francs ($57.71). Jimenez said that In Europe, prices had dropped 5 percent already this year, with no end in sight. “We can’t absorb these price cuts without taking action.”

Novartis plans to shut down two manufacturing sites in Switzerland, transferring production to other locations or third parties. It plans to save about $200 million annually by outsourcing research and development jobs in Switzerland and the Unites States.

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