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US pharmaceutical giant could axe jobs in UK

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by Kay Mitchell

A major restructure at US pharmaceutical giant, Eli Lilly, is set to put UK jobs at risk.

The company has announced details of a restructuring programme, which it described as the most significant in its history, will see global headcount reduced by 14% over the next two years.

The Indianapolis-based drugs company, which has a workforce of 40,500, is to axe 5,500 positions.

The company employs 1,600 at UK sites in Basingstoke, Speke in Liverpool and Erl Wood near Ascot.

The job losses come as the group prepares to lose patent protection for some major products including the top-selling Zyprexa – the schizophrenia drug. These drugs account for around 70% of sales.

The group’s chief executive, John Lechleiter, said the global pharmaceutical industry has been hit by “slowing innovation, rising costs, patent expirations and increased generic competition.”

“The changes we are announcing will accelerate the progress of the most exciting pipeline in our history. The changes will also ensure that we meet the changing needs of our customers and operate our business in a manner consistent with an increasingly challenging environment,” said Mr Lechleiter.

The group hopes to save an estimated $1 billion in annual operating costs.

The pharmaceutical industry has been hit hard by the economic downturn. Earlier this year, the UK’s second-largest drug maker, AstraZeneca, announced plans to cut 6,000 jobs globally over the next four years.

Meanwhile, there has been much consolidation within the industry this year after Merck bought rival Schering-Plough in a $41.1 billion deal and followed Pfizer’s $68 billion takeover of rival Wyeth.

In related news today, Canadian car parts manufacturer Magna could axe as many as 10,500 jobs at Opel and Vauxhall in Europe.

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News posted: September 15, 2009

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