Those Merck Layoffs Are Imminent For Some

Those Merck Layoffs Are Imminent For Some

September 20th, 2011 // 12:51 pm @

A few weeks ago, Merck disclosed plans to trim another 12,000 to 13,000 jobs by the end of 2015 in order to save up to $1.5 billion. This is on top of previously announced cuts although efforts to reduce headcount are forcing managers to accelerate their plans.

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In a memo written the other day, Merck’s US Market president Mark Timney informs staffers that cutting expenses by eliminating vacant positions, by itself, just isn’t sufficient to meet targets. And so a handful of departments should brace for layoffs that will be decided by the end of next month. These include Marketing & Customer Solutions; Managed Markets & Policy; Strategy & Commercial Model Innovation; and the Neuropsychiatric and Women’s Healthcare specialty sales teams. These are located in Merck’s CIA-like headquarters in rural New Jersey. Volunteers, by the way, are encouraged to ‘hand raise’ if a package seems appealing.

This is hardly surprising, given the extent of the planned job cuts that Merck envisions over the next few years. The goal is to bring total headcount much closer to levels that existed before Schering-Plough was acquired; at the time, Merck employed about 53,000 people. As of the end of June, Merck employed about 91,000 people worldwide. Nonetheless, the move is certain to further undermine morale and his approach is prompting some criticism that Merck is being disingenuous about expressing concern for its employees. Here is the memo…

Mark Timney, President US Market
TO: All US Market Colleagues (HQ & Field)
DATE: September 15, 2011
SUBJECT: Update on Ongoing Changes to the US Market’s Business Operations

Dear Colleagues:

Merck is facing enormous challenges. The external environment is tougher than ever, with an unprecedented pace of change that continues to accelerate. Critical to Merck’s need to transform is our ability to fundamentally change how we operate our business, including managing resources differently and reducing our expense base. We must challenge and prioritize every single investment choice to ensure that we are nimble, flexible and streamlined as we drive profitable growth.

The US Market is taking additional steps to accelerate plans to manage our expense base, in part because our current vacancy management approach is not allowing us to reach expense targets quickly enough. In the coming weeks, we will restructure the following select HQ functions and field groups within the US Market: Marketing & Customer Solutions; Managed Markets & Policy; Strategy & Commercial Model Innovation; and the Neuropsychiatric and Women’s Healthcare specialty sales teams. Effective immediately, we will also increase the use of vacancy management by removing more open positions across the entire US Market organization. These necessary actions are part of and consistent with the important role we play in GHH’s contribution toward Merck’s overall transformation and, as I have stated previously, we cannot promise the avoidance of such activities.

We will move quickly in order to minimize disruption for customers, our business and employees. The restructuring exercise within the select areas will be completed and affected employees will be informed by the end of October 2011. Employee selection decisions will follow established company processes. We will also offer the opportunity for employees in the aforementioned select areas to proactively “hand raise” and be considered for separation.

Over the past few years, the US Market has made significant reductions in our organization. However, the unfortunate reality is that we must do more and move now if Merck is to be successful over the long term. Making difficult choices in select functions, based on an assessment of the business risks and opportunities identified within each area, will allow us to transform our business and capitalize on the most significant market opportunities in 2012 and beyond. In fact, we all must commit to challenging the status quo and be willing to make fundamentally different choices than in the past.

The Path Ahead

I know how difficult this is for our organization, particularly the people who are directly affected. Though this exercise affects select groups within the US Market, I’ve always committed to you that I will be transparent and open, and keep everyone up to date on important actions within our business. That is why I am sending this message to all colleagues within the US Market. I will continue to keep you updated as appropriate.

The US Market remains committed to growing our business over the long term and achieving our 15×15 goal in line with our values and standards. Our strategy, which remains unchanged, reinforces the need for us to change our underlying operations and enables our ability to grow. We will continue to sharpen our core business focus and invest in growth opportunities that optimize value for patients, customers and shareholders.

The US Market is a high-performing and resilient organization. I know that I can depend on you to continue to make leading contributions to Merck’s long-term success and to helping our customers help their patients be well.

Source: Pharmalot


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