Merck Plans 7,200 Job Cuts; Will Spend Up to $2 Billion on Layoffs

Merck described the astonishing scale of its layoffs program today. The company will spend up to $2 billion when it is done, and will have axed 17,600 jobs in total. Here’s a breakdown of the plan:

1. The cuts cost $757 million in the third quarter of 2008.
2. $49 million was spent on cuts in the third quarter of 2007.
3. Total overall costs associated with the company’s global restructuring were $847 million and $178 million for the third quarter of 2008 and 2007, respectively,
4. The company also lost $62 million from its investment portfolio
5. The 7,200 jobs lost include 6,800 active employees and 400 unfilled vacancies “across all areas of the company.”
6. Senior and mid-level managers will be reduced by 25 percent
7. The job losses come on top of the 10,400 positions already lost at the company.
8. Merck now has only 56,700 employees.
9. The company thinks it will save between $3.8 billion and $4.2 billion by doing this.
10. Those savings come in addition to the $4.5 billion to $5 billion which the company already hoped to save prior to 2010.
11. The Company anticipates more costs of $250 million to $450 million to come in the fourth quarter of this year.
12. This restructuring is expected to be done by the end of 2011; with the total costs estimated at $1.6 billion to $2.0 billion.