According to a Janssen Pharmaceutica statement, the move comes in a bid to reduce costs at the company by 15 per cent, and will involve the loss of 521 fixed contracts and the "non-prolongation" of 167 temporary jobs at the firm's Belgian operations. The job cuts are the consequence of restructuring plans announced by the Belgian firm's parent company Johnson and Johnson (J&J) back in July, when the major healthcare manufacturer revealed initiatives intended to result in pre-tax annual savings of up to $1.6bn (€1.2bn) for 2008 alone.
In the company statement announcing the Belgian job cuts, Janssen Pharmaceutca recounts the woeful circumstances in which the pharmaceutical industry finds itself, and how the company has become the victim of impending patent expiries, increasing regulatory hurdles, higher R&D costs and extended development timelines as new drug products become increasingly complex. The company is indeed facing imminent patent expiry of two of its key drugs, including schizophrenia treatment Risperdal (risperidone), which between them currently generate around $5bn for the company.
J&J targeted its pharmaceuticals sector for the majority of its cost-cutting measures, with Janssen Pharmaceutica bearing the brunt of the first wave of cuts, which will eventually total between 3,615 and 4,820 job losses. Janssen Pharmaceutica says it will refocus is business model as a result of the restructuring, building on its core competencies in R&D, manufacturing, marketing and sales. The firm says it will continue its programme of investments in its Belgian sites, with a major multi-million-Euro investment in a new pilot plant at its Geel site still going ahead.
The €130m project was announced last November, and represented the largest investment project in the firm's history. The new chemical development pilot plant is scheduled to come on line in 2011, focussing on active pharmaceutical ingredients in late stage clinical development. At the time, the investment by parent company J&J was touted as "a solid indication of the confidence that Johnson & Johnson has in Belgium," and as the "link between research and production" that would establish the Belgian activities as a linchpin in J&J's plans.
However, the cuts at the sites in Geel and Beerse will be a blow to those who saw the continued investment in the Belgian operations as a sign that their jobs would be safe. Janssen Pharmaceutica's Belgian operations include sites in Beerse, Geel and Olen, which together have a workforce numbering around 4,700, with just under 900 in Geel. Together these sites currently produce the active ingredients for over 65 per cent of all the drugs supplied by Johnson and Jonson worldwide.
No one from the company was available for comment prior to going to press.