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Dec 16, 2008

Bristol-Myers Plans Additional 8,000 Layoffs

Bristol-Myers Squibb Co. said it will cut another 10% of its work force on top of a 10% reduction already under way, bringing its planned reductions to about 8,000 employees by 2010.

The New York-based drug maker said it expects to have cut 800 positions as part of the latest round of cuts by the end of the month. The company is continuing with its previous moves announced in July to eliminate 4,300 jobs.

After announcing the sale of a wound-care unit with 3,400 workers earlier this year, Bristol-Myers's world-wide work force numbered 37,000 in November.

Bristol-Myers, facing pressure like others in the drug industry from looming patent expirations and difficulty in finding new products, is seeking to reduce its costs by $2.5 billion by 2012.

The latest round of cuts will be broad and global, including researchers and sales employees, the company said. The cuts are "designed to help us address the challenges and uncertainties our company is facing in the short and long term," spokeswoman Sonia Choi said.

Bristol-Myers had a strong third quarter, thanks to solid sales of anticlotting agent Plavix, psychiatric drug Abilify and the cancer drug Erbitux, which it co-markets with ImClone Systems Inc. Plavix, co-marketed with Sanofi-Aventis, has brought the company more than $4 billion in sales this year but could face generic competition in the U.S. around 2011.

The company has decided to narrow the focus of its drug-development efforts and to focus on its core pharmaceutical business, selling its wound-care unit, Convatec, in May. It also plans to offer a partial initial public offering of its nutritionals business, Mead Johnson, in the first half of 2009.

Bristol failed in its attempt to buy ImClone earlier this fall. Instead, ImClone was acquired by Eli Lilly & Co., depriving Bristol of full ownership of Erbitux and other cancer compounds ImClone is developing. Last week, Bristol announced a $240 million partnership with Exelixis Inc. to co-develop cancer drugs.

In 4 p.m. composite trading on the New York Stock Exchange Tuesday, Bristol-Myers shares were unchanged at $22.50.

Source : WSJ
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