Merck Undergoes Restructuring

Company will improve their manufacturing and supply networks.


In conjunction with a $16 billion capital investment campaign to expand manufacturing capacity for cancer medicines, vaccines and animal health, Merck & Co. will be closing or divesting other facilities and reducing their employee headcount.


The restructuring will carry a pretax cost of $800 million to $1.2 billion, according to the company, with slightly more than half paid out in cash as severance and plant shutdown costs. The overall goal is to optimize Merck’s manufacturing and supply operations while reducing its total physical footprint around the world.


No specifics were given on the number of jobs to be cut or facilities to be closed, and the company noted that it may make additional changes as the restructuring proceeds. Currently, the company employs approximately 69,000 people.


With the restructuring, Merck is joining other major pharma companies in their effort to optimize operations. Teva will be closing or selling 11 of its production sites in 2019, while Bayer will be cutting 12,000 jobs and exiting the animal health business; Novartis will be reducing its workforce in the UK and Switzerland by 2500.



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