Eli Lilly and Co. and Public Companies and Layoffs and Employment and Health Care & Life Sciences

Lilly reducing sales force by 191 as part of larger restructuring

November 2, 2009

Eli Lilly and Co. has notified the state that it will eliminate 191 sales jobs as part of a company-wide restructuring announced in September that ultimately will result in 5,500 job cuts by the end of 2011.

The pharmaceutical giant informed the Indiana Department of Workforce Development that the job cuts will come from within the company’s osteoporosis, diabetes and neuroscience sales forces at Lilly Technology Center South; the notice was posted on the state Web site Monday afternoon.

Their last day of employment is expected to be Dec. 31, Lilly said. However, affected employees will have the opportunity to apply for open positions within the company from Nov. 30 to Dec. 2 and again on Dec. 9.

Lilly, which had $20 billion in total revenue last year, hopes to shave $1 billion mainly by reducing its worldwide work force from 40,500 to 35,000. Its Oct. 30 notice to the state provides the first indication of which local employees will be affected by the restructuring.

Following the September announcement, Lilly CEO John Lechleiter said he did not know how many of the job cuts would occur in central Indiana or what types of jobs would be cut. But, with about 13,000 employees in the Indianapolis area, he acknowledged the largest chunk of reductions likely would come here. All told, the cuts represent a 13.5-percent reduction to Lilly’s total work force, which, if applied locally at the same percentage, would eliminate roughly 1,700 area jobs.

The job cuts are being made as Lilly restructures the company into five business units, with the goal of bringing new medicines to market faster. The units will be in animal health, cancer, diabetes, emerging markets and established markets, which will include the United States and Europe, as well as Lilly’s bestselling drugs. Lilly will also launch a new drug-development initiative, called the Development Center of Excellence, to speed drug development in later stages of testing.

Lilly hopes the restructuring will lessen the sting of losing most of the $4.7 billion in annual revenue from its bestselling drug Zyprexa, as cheaper generic copies hit the market within the next two years. And in the following three years, Lilly will lose patent protection on four more drugs, representing another $7.2 billion in annual revenue.



 

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