Eli Lilly will reduce its workforce by 13.5% in the next two years, to cut costs when its patents expire. MarketWatch has more:
Early Monday, Lilly said that it plans to whittle down its global ranks to 35,000 employees by the end of 2011, a move that should help reduce its cost structure by about $1 billion. Lilly currently has about 40,500 employees worldwide.
In a statement, Lilly attributed the move to the expected loss of market exclusivity for several key products, beginning in 2011.
Lilly’s top-selling product, the antipsychotic Zyprexa, is slated to lost patent protection in 2011. The drugmaker is expected to lose protection for its second best-seller, the antidepressant Cymbalta, around 2013. Also slated to lose protection over the next few years are the osteoporosis drug Evista, insulin product Humalog, and lung cancer treatment Alimta. Each drug generates annual sales of over $1 billion.
As part of the cost-savings initiative, Lilly also said it plans to reorganize the company into five units: oncology, diabetes, established markets, emerging markets and animal healthcare.
AdvanceIndiana has more on the people likely to be most affected by the cuts:
…many of the cuts could come in Indianapolis where the company employs 13,500 at its corporate offices, labs and manufacturing facilities. Lilly has already reduced its workforce by several thousand through attrition over the last several years. The City of Indianapolis gave tens of millions of dollars in tax abatement incentives to the company during the administration of Mayor Bart Peterson, who is now a senior vice president with Lilly, based on investment and employment promises made by the company.