Business Daily from THE HINDU group of publications
Wednesday, Jan 28, 2009
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Business Daily from THE HINDU group of publications Wednesday, Jan 28, 2009 ePaper | Mobile/PDA Version | Audio | Blogs |
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Mergers & Acquisitions Web Extras - Employment Fear of job cuts casts shadow on Pfizer-Wyeth deal P.T. Jyothi Datta Mumbai, Jan. 27 Uncertainty prevailed among Wyeth’s employees in India, as they got back to work after the extended ‘Republic’ weekend during which Pfizer announced its global $ 68 billion acquisition of Wyeth. It will be several weeks before the deal is globally consummated and the effects trickle down to the Indian operations, provided there are no counter-offers. But that notwithstanding, members of Wyeth’s 800-strong team in India are already feeling unsettled at the thought of imminent job-losses, as Pfizer and Wyeth sit down to map strategies that will look to trim redundancies, said a Wyeth employee. In emerging areas like vaccines or bio-pharmaceuticals, employees have a fighting chance, as these are areas where Wyeth’s strengths will complement Pfizer’s operations. But in the generic medicines segment (where drugs that are chemically similar to innovative drugs are made) there is the worry of job-loss, the Wyeth insider said. Also, there are several senior people who have put in more than 20 years, and they too are feeling unsettled, as the job-market is bleak, the employee added. New Chairman On Tuesday, Wyeth announced that Mr R.S. Poulton resigned as Director of the company effective January 26 and the company’s board appointed Mr B.R. Arora as Director and Chairman of the India operations, from the same date. Company officials, however, said that there was no connection with the Pfizer deal. Wyeth USA holds 51 per cent in its Indian arm, as on December 2008.
Meanwhile, Wyeth employees received an e-mail from their global chief, explaining the “challenging” environment because of which the deal had to be forged. It would help leverage Wyeth’s existing business to a higher level, besides bringing value to shareholders, employees were told. At Pfizer too, there have been internal communications back and forth explaining the deal. But on the course that the acquisition would take in India, an emailed response from Pfizer Inc said: “While we are excited the proposed transaction will create the world’s premier biopharmaceutical company, it is too early to discuss how integration will impact the two companies locally. We will conduct a thorough analysis of our global workforce and ensure that we are best positioned to serve our customers while achieving our competitive cost structure.” But with global media reports saying that Pfizer was also set to cut 10 per cent of its 81,900-strong staff and close five of its manufacturing plants, the mood of uncertainty and nervousness would run though Pfizer’s regional operations as well, observed an analyst. Reports also quoted Pfizer as saying that about 15 per cent of the workforce would be laid off in a second round, from the combined Pfizer-Wyeth staff of 120,000, taking the total to 26,000 jobs lost. Pfizer has already cut 4,700 jobs in 2008, the global news reports added. But till details on the integration process between Pfizer and Wyeth become clear, the contract research deal that Wyeth has with GVK Biosciences continues unchanged, said a GVK official. ‘Pfizer, Wyeth operations are complementary’ Wyeth Q4 net profit down on higher input costs More Stories on : Mergers & Acquisitions | Pharmaceuticals | Employment
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