AstraZeneca plc (ADR) (NYSE:AZN) plans to cut some back office jobs in the U.K. as the company works toward cost-cutting and operation consolidation. The latest job cut by the company in the U.K. will be at its finance division located in Alderley Park, England.
Some 280 employees work at the company’s finance office in Alderley Park. The jobs will be moved to regional centers or transferred to the company’s headquarters in Cambridge.
The headcount adjustment at the finance operation is part of measures by the company to eliminate about $1.1 billion in annual costs. But it remains unclear at this juncture how many workers in Alderley Park will be affected.
“Employees globally have been briefed on these changes and individual employee consultations will now begin for impacted individuals […]. Naturally these discussions will remain confidential,” said a spokesperson for AstraZeneca.
The planned staff cut at Alderley Park finance office comes at a time when AstraZeneca plc (ADR) (NYSE:AZN) is struggling with payer pressure to cut prices of diabetes and respiratory drugs. But payer pressure is taking a toll on the company’s profitability. The company has posted profit declines in all the quarters reported so far this year. In 3Q16 the company said its profit dipped 12%, following a 22% decline in 2Q16 and a 12% drop in 1Q16.
As such, AstraZeneca has recently been working to boost its manufacturing capacity in biologics as it scales down in areas that have become less attractive. At the same time, the company has been pursuing business consolidation, largely to help it whittle down costs and improve the bottom line.
But AstraZeneca is not the only drug company feeling payer pressure and needing to adjust its headcount to stay afloat. Novartis AG (NYSE:NVS) kicked off a review of its global staffing in 2014, targeting to move 4,000 jobs to regions where labor costs are lower. It chose India among other markets for the thousands of jobs it was moving.
AstraZeneca plc (ADR) (NYSE:AZN) stock is down more than 23% so far in 2016.
Note: This article is written by Andy Parker and originally published at Market Exclusive.