IBJNews

Lilly reorganization to cut 5,500 positions over 2 years

Back to TopCommentsE-mailPrintBookmark and Share

Eli Lilly and Co. will cut 5,500 jobs by the end of 2011 as it tries to cut $1 billion in expenses before it loses the revenue from its bestselling drug, Zyprexa.

Lilly officials broke the news to the company’s 40,500 global employees at 8:30 a.m. Lilly CEO John Lechleiter said he did not know how many of those cuts would occur in central Indiana. But with about 13,000 employees in the Indianapolis area, he acknowledged the largest chunk of reductions would likely come here.

The job 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 will be made after Lilly restructures the company into five business units, with the goal of bringing new medicines to market faster.

Lilly faces the patent expiration of Zyprexa in November 2011, after which it will lose most of the drug’s $4.7 billion in annual sales to cheaper generic versions. Also, patents will expire on four other blockbuster drugs by 2014.

The units will be in animal health, cancer, diabetes, emerging markets and established markets, which will include the U.S 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 up drug development in its later stages.

The leaders of those new units, which will launch Jan. 1, will be:

— Cancer: John Johnson, CEO of ImClone Systems, which Lilly bought in 2008.

— Diabetes: Enrique Conterno, president of Lilly USA.

— Animal health: Jeff Simmons, who already leads this unit, called Elanco.

— Emerging markets: Jacques Tapiero, president of Lilly’s intercontinental region.

— Established markets: Bryce Carmine, Lilly’s executive vice president of global marketing and sales.

— Development Center of Excellence: Dr. Tim Garnett, Lilly’s chief medical officer, and Thomas Verhoeven, Lilly’s senior vice president for global product development.

Lilly CEO John Lechleiter said the changes would help Lilly get through lean years and respond to the increasing pressures it faces from health care reform and pricing demands from governments and insurers across the globe.

"We're going to see better decision-making, much more opportunity seeking," Lechleiter said, adding that Lilly would be "a company that is more focused and competitive than ever."

ADVERTISEMENT

  • Blame Mgmt
    Esta,

    Nice try. This is more a result of economic pressures, competitive landscape, and frankly, Lilly's own mismanagement. The cuts have been taking place slowly for a couple of years. The company is preparing for when their blockbuster drugs are no longer protected from generics, and with no new drugs near market, this puts Lilly in a dangerous place.

    It's fun but ignorant to place blame on a single party. Remember, that Bush started the TARP payments that Obama continued. He also stripped you of some of your basic civil freedoms, so he was hardly a better choice!!
  • Mr. Obama and Ms. Pelosi's health care reform is already working at keeping costs down! Don't mind the 1,700 local families that will be losing their coverage, not to mention their income, or the increased burden on the unemployment system, or the decrease in payroll taxes, or the decrease in incomes taxes, the rich folks will just have to ante up.
  • Dr. Lechleiter's and Lilly's executive committee are having to make some very tough decisions in preparation for health care reform. I support their decision knowing that when the dust settles, Lilly will be there for its employees, retirees, community and loyal customers.

Post a comment to this story

COMMENTS POLICY
We reserve the right to remove any post that we feel is obscene, profane, vulgar, racist, sexually explicit, abusive, or hateful.
 
You are legally responsible for what you post and your anonymity is not guaranteed.
 
Posts that insult, defame, threaten, harass or abuse other readers or people mentioned in IBJ editorial content are also subject to removal. Please respect the privacy of individuals and refrain from posting personal information.
 
No solicitations, spamming or advertisements are allowed. Readers may post links to other informational websites that are relevant to the topic at hand, but please do not link to objectionable material.
 
We may remove messages that are unrelated to the topic, encourage illegal activity, use all capital letters or are unreadable.
 

Messages that are flagged by readers as objectionable will be reviewed and may or may not be removed. Please do not flag a post simply because you disagree with it.

Sponsored by
ADVERTISEMENT

facebook - twitter on Facebook & Twitter

Follow on TwitterFollow IBJ on Facebook:
Follow on TwitterFollow IBJ's Tweets on these topics:
 
Subscribe to IBJ
  1. Those of you yelling to deport them all should at least understand that the law allows minors (if not from a bordering country) to argue for asylum. If you don't like the law, you can petition Congress to change it. But you can't blindly scream that they all need to be deported now, unless you want your government to just decide which laws to follow and which to ignore.

  2. 52,000 children in a country with a population of nearly 300 million is decimal dust or a nano-amount of people that can be easily absorbed. In addition, the flow of children from central American countries is decreasing. BL - the country can easily absorb these children while at the same time trying to discourage more children from coming. There is tension between economic concerns and the values of Judeo-Christian believers. But, I cannot see how the economic argument can stand up against the values of the believers, which most people in this country espouse (but perhaps don't practice). The Governor, who is an alleged religious man and a family man, seems to favor the economic argument; I do not see how his position is tenable under the circumstances. Yes, this is a complicated situation made worse by politics but....these are helpless children without parents and many want to simply "ship" them back to who knows where. Where are our Hoosier hearts? I thought the term Hoosier was synonymous with hospitable.

  3. Illegal aliens. Not undocumented workers (too young anyway). I note that this article never uses the word illegal and calls them immigrants. Being married to a naturalized citizen, these people are criminals and need to be deported as soon as humanly possible. The border needs to be closed NOW.

  4. Send them back NOW.

  5. deport now

ADVERTISEMENT