Eli Lilly and Co. and Health Care Businesses and Health Care & Life Sciences and Health Care & Insurance and Pharmaceutical

Lilly to let 115 workers go in new outsourcing deal

March 26, 2010

Eli Lilly and Co. will trim another 115 jobs from its work force but hopes to keep those employees working in exactly the same place they are now.

The Indianapolis-based drugmaker announced a five-year deal this morning with Massachusetts-based Thermo Fisher Scientific to take on duties to manufacture, package and label the products Lilly uses in its clinical trials of experimental drugs.

That work is and will continue to be done in the northern part of the Lilly Technology Center, located South Harding Street south of downtown Indianapolis. However, Thermo Fisher’s subsidiary, Fisher Clinical Services, has agreed to purchase from Lilly the equipment it uses to do that work.

Financial terms of the deal were not disclosed.

All affected Lilly employees can apply for jobs with Fisher, according to the companies, although they did not disclose how many Fisher planned to hire.

Of the affected employees, 80 are full-time workers, which means they can apply for other internal openings at Lilly or take a severance.

Another 20 of the workers have fixed-duration employment contracts and a further 15 are contractors. They, too, can apply with Fisher but will not receive any severance from Lilly.

Fisher will make its decisions about hiring Lilly workers in about three weeks, said Lilly spokeswoman Christine Van Marter.

Lilly has been outsourcing an increasing amount of work and trimming its staff accordingly. The company’s payroll has shrunk to nearly 40,000, down from 46,000 six years ago, even though the Lilly acquired ImClone Systems Inc. and several smaller companies.

In September, Lilly announced a two-year plan to cut its workforce by 5,500 people.

"Transitioning work like the manufacturing, packaging and labeling of clinical trial materials to Fisher Clinical Services helps us also reach Lilly's corporate goals of reducing the costs of drug development and speeding innovative medicines to patients,” said Ralph Lipp, vice president of pharmaceutical sciences research and development for Lilly, in a statement.

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