AstraZeneca plc (NYSE:AZN) Begins $1.1B Cost-Cutting Plan With Sales Reps Cutbacks

AstraZeneca plc (NYSE:AZN) Begins $1.1B Cost-Cutting Plan With Sales Reps Cutbacks

AstraZeneca plc (NYSE:AZN) confirmed earlier this week the cutting of its Publicis Touchpoint Solutions contract. The company is also reviewing its list of direct employees.

This cutback plan is part of AstraZeneca’s proposals to cut its annual costs by up to $1.1 billion by 2018.

Affected Labor Force

According to Publicis Touchpoint Solutions sales representatives in AstraZeneca, 1,600 contractual workers will take a hit from the cutbacks. Diabetes sales representatives are said to be affected the most.

The cutbacks will take effect by June 30 as announced in a conference call last Monday. However, the pharmaceutical giant has not yet confirmed the exact figures.

Abby Bozarth, AstraZeneca spokesperson, explained that AstraZeneca is carefully reviewing its employees. She reiterated that the company seeks to make reasonable choices that will bring further growth and success.

Why AstraZeneca Is Cutting Expenses

AstraZeneca revealed its cost-cutting plans immediately after releasing its fourth quarter results. While the $6.10 billion revenue beat expectations, the pharmaceutical company hopes to strengthen its core further.

The company is performing well particularly in China. AstraZeneca continues to experience double-digit growth in the region despite the ongoing economic crisis. However, some of its key products such as Symbicort were not as stable as its other leading brands.

Other Pharmaceutical Layoffs

AstraZeneca is not alone in this sales representatives’ layoff decision. Japanese company Daiichi Sankyo Co. Ltd. has recently revealed that it plans to cut 1,200 jobs in its US-based headquarters. Meanwhile, GlaxoSmithKline plc (NYSE:GSK) will cut hundreds of jobs in line with a restructuring effort worth $1.60 billion.

Sanofi SA (NYSE:SNY) will carry out 155 layoffs in its sales and marketing departments in France. Valeant Pharmaceuticals International, Inc. (NYSE:VRX) also announced that it will cut nearly 300 dermatology, women’s health, GI and Addyi sales representatives combined.

The company has long been embattled with consecutive problems, the latest of which includes a massive sales decline due to patent expiration and generic competition.