Amgen is slashing 15% of its workforce and closing two US manufacturing facilities as part of a restructure the firm says will save $700m (€520m) a year.
According to Amgen’s annual report , the company had around 20,000 staff at the end of 2013. However, as part of a plan to restructure its operations, between 2,400 and 2,900 jobs - 12-15% of the workforce - will be lost.
The decision was made by the Board last weekend but announced yesterday during a conference call to discuss Amgen’s Q2 2014 results. CEO Bob Bradway told investors many of the jobs will go at the company’s headquarters in Thousand Oaks, California, whilst others will be lost at manufacturing sites in Bothell, Washington and Boulder, Colorado, which will close as part of a reduction of Amgen’s manufacturing footprint.
“We plan to close all of our facilities in Washington and Colorado before the end of 2015,” Bradway said (transcript here ). “We’ll begin the process of exiting these sits in the third quarter of this year.”
He continued: “We anticipate approximately a 23% reduction in our facilities footprint as part of this first step in our restructuring.”
A substantial amount of Amgen’s clinical manufacturing activities occur at the Thousand Oaks facility, according to the annual report, while the site also makes the combination products for the monoclonal antibody blockbuster drug Enbrel , worldwide sales of which stood at $1.2bn for the quarter, up 7% on the same period last year.
The Longmont, Colorado site made the bulk drug substance for Epogen, used to treat anaemia, but manufacturing operations were halted in April this year . At the time, the firm also announced 220 jobs – about a third of the 650 strong workforce - were set to go.
The facility closures and reduction in staff will save the company approximately $700m in operating expenses in 2016, compared to 2013, with Bradway telling stakeholders “most of the savings will be reinvested to support global launches of new products.”
These actions will result in pretax charges of up to $950 million, primarily incurred in 2014 and 2015. For the second quarter 2015, total sales were $5.2bn, up 11% year-on-year, whilst operating expenses remained flat at $3.3bn. Net income grew 26% to $1.8bn.