Over the next two years, Merck will shut down eight manufacturing plants, as well as eight research sites, as part of the ongoing Schering-Plough merger process. The company said in a statement that the various site exits will help “create a flexible R&D organization.”
Taking a page out of Pfizer’s book (Pfizer announced plans to cease production at eight of its global manufacturing sites in late May), Merck said it would try to make the transitions as painless as possible, working with local governments and other manufacturers to sell the plants in the hope of keeping workers employed. Still, Merck expects the worldwide cuts to total 15 percent of its work force by 2012.
Two of the sites being phased out are in the US, seven are in Europe, with the rest scattered from South America to Canada. Sixteen worldwide R&D labs were spared, and the company said it will continue to focus on cardiovascular, metabolic, and infectious disease areas, as well as four others.
Merck is also hoping to find annual savings of $3.5 billion by 2012. In addition to creating a flexible R&D organization, the company will also save $2.7 billion to $3.1 billion as a result of this restructuring.