Merck & Co. plans to cut another 8,500 jobs as the drugmaker continues its struggle with competition from cheaper generic medications that have squeezed the pharmaceutical industry for several quarters now.
The New Jersey-based company said the reductions it announced Tuesday are in addition to a total of 7,500 cuts it had previously announced but hasn't carried out. That means it is slashing about 20 percent of its workforce, currently at about 81,000 people. Merck, the world's third-largest drugmaker, said the restructuring will cost a total of between $2.5 billion and $3 billion before taxes, mainly due to employee severance costs. But it expects the moves to help generate annual savings of about $2.5 billion by the end of 2015. It expects to realize $1 billion by the end of 2014. Most of savings are expected to come from marketing and administrative expenses and research and development.