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Up and down: The A's and B's of staffing
Late January has been filled with big layoff news, as Novartis announced it would axe 1,900 people, Takeda upped the ante with 2,800 and Alylam let everyone know that it was cutting some one-third of its workforce. On the hells of all that, there is a bit of good news/bad news, with Abbott saying 700 workers are now looking at pink slips even as Bayer AG says it will be creating 1,000 new jobs in Australia.
What made the Abbott news a bit more notable than it might have been otherwise, in the face of larger layoff elsewhere, was that it had only just the day before presented a favorable financial report, saying diluted earnings per share grew 11.5 percent; worldwide sales increased 4.1 percent, to $10.4 billion; fourth quarter results included an adjusted gross margin ratio of nearly 64 percent, driven by improved efficiencies across a number of operating divisions, product mix, and the effect of foreign exchange; that Abbott "continued to advance its broad-based pipeline, and launched several new products or indications across our Pharmaceuticals, Medical Products, Nutritionals and Diagnostics businesses;" and that Abbott generated record operating cash flow of more than $9 billion in 2011, and as such will resume share repurchase activity in 2012.
"Despite another challenging year for the global economy, Abbott again delivered leading performance, including strong sales and ongoing earnings-per-share growth," said Miles D. White, chairman and CEO of Abbott. "2011 was a significant year for Abbott, with the announced plan to separate into two leading health care companies in research-based pharmaceuticals and diversified medical products, each offering shareholders distinct identities with unique investment opportunities. We remain on track to complete the separation by the end of 2012."
The 700 layoffs are primarily in manufacturing operations, with plans to eliminate several hundred additional positions over the course of the year, according to the company, which attributed at least some of the layoffs to the impending mid-2012 expiration of Abbott's contract to supply the artery-opening stent Promus to Boston Scientific Corp.
On the other hand, international pharmaceutical giant Bayer plans to boost its investment in Australia and create nearly 1,000 jobs there. That news, however, is tempered, howeveróat least for those of us in the pharma/biotech worldóby the fact that the boosts seem to be centered around its crop-care business, meaning a very indirect benefit to the pharma side.
Bayer, which already has operations in healthcare, crop science and material science in Australia, is planning to boost its workforce of 850 people over the next three to four years. However, getting back to the positive side with a more pharma twist, the introduction of new medical products to the Australian market over the next few years is also expected to boost Bayer's Australian sales revenue by more than 10 percent each year until it reaches an expect $1 billion or more by 2015.