Merck & Co., Inc. (NYSE:MRK) To Cut Jobs In R&D While Increasing Research Site Investment

Merck & Co., Inc. (NYSE:MRK) To Cut Jobs In R&D While Increasing Research Site Investment

Merck & Co., Inc. (NYSE:MRK) has announced that it will be cutting some jobs in the discovery and early-stage R&D business but will also increase investment in new labs to compensate. The company noted that workforce reduction at Kenilworth and Rahway, New Jersey and North Wales, PA screening sites would help it increase investment in exploratory biology in Cambridge, Massachusetts, and the San Francisco Bay area.

The company has not publicly announced how many of its staff will lose their jobs but did say that it expects around 10% of the discovery, preclinical and early development staff to be impacted, including employee moves and separation. The new labs at Cambridge will focus on emerging science, irrespective of therapeutic area. A spokesperson for the company noted that the initial exploratory research would include Host-pathogen interaction and the role of the microbiome in the disease process. The new San Francisco Bay study site will focus on cardiometabolic disease and oncology discovery.

Merck is also in the final stage of searching for a long-term location to house and consolidate its CMR discovery and oncology and I/O biologics work in a combined research site. The company noted that its Palo Alto site would continue to focus on immuno-oncology and biologics vaccine discovery until a long-term facility is established.

SinceKen Frazier became Merck’s CEO in 2011, he has been aiming to overhaul and streamline the company’s operations. Three years ago, Merck axed 8,500 staffers in a $2.5 billion restructuring plan. Much of the money saved was used on research spending and deals. In 2015, the company estimated that it had laid off more than 36,000 workers since 2010 as part of a massive restructuring effort.

Other drugmakers also have been downsizing their research department to invest in areas they consider more promising. These include Pfizer Inc. (NYSE:PFE) and AstraZeneca plc (NYSE:AZN), among others. Some companies have used the strategy of signing deals with smaller, specialized companies.