It was only a couple of months ago when drug maker Novartis AG (NYSE: NVS) announced that it would be slashing 1,260 jobs in the U.S., and today we get news of another 2,500 job cuts worldwide by the year 2010.Novartis has been particularly hard hit lately in the generic drug market from increased regulatory demands and Increased competition. During the July through September quarter, the company showed that profit fell by over 12 percent. The company did, however, benefit nicely from the sale of its Gerber baby foods and Medical Nutrition units to Nestle SA.
Looking ahead, the company is hoping that it will be able to regain momentum though engineering new drugs and streamlining its units.
One place where employees will not have to worry about today's job cuts are workers at the company's plant in Cambridge, Mass. A company spokesman has already stated that these jobs "are not at risk".
By cutting these additional 2,500 jobs, the company is now estimating that it will be able to save $1.6 billion annually. While no one likes to see news of job cuts, for Novartis, these cuts seem to make sense at this time. According to Denise Anderson, an analyst at Landsbanki Kepler, "Now is not a good time to be in big pharma," and that "the company doesn't see it as a short-term thing.''
Michael Fowlkes has worked as a stock trader for seven years and spent the last four years working as an analyst for the online investment advisory service Investor's Observer.
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