Novartis to Cut 500 Jobs in U.S., Europe in Research Revamp

Novartis AG (NOVN) plans to close two sites in Europe, move staff from California to the Boston area and cut about 500 jobs in an effort consolidate its research operations, especially in respiratory diseases.

Novartis plans to close sites in Horsham, England, and Vienna and move cancer research from Emeryville, California, to Cambridge, Massachusetts, Eric Althoff, a spokesman for the company, said in an e-mailed statement today. The biotherapeutics development unit in La Jolla, California, will be closed, he said.

The changes come as the company’s new chairman, Joerg Reinhardt, is scrutinizing Novartis’s operations. Reinhardt began a review of the portfolio after taking over in August, and has said Basel, Switzerland-based Novartis wants its businesses to be among the industry leaders or will otherwise consider divesting them. Novartis employs more than 125,000 people.

“We are taking action to co-locate scientific resources in order to improve the efficiency and effectiveness of our global research organization,” Althoff said.

The final number of cuts is subject to employee consultation processes in the U.K. and Austria, Althoff said. Since new positions may be created in Cambridge, net job loss could be lower, Althoff said.

Shire Plc, the maker of the Vyvanse pill for attention-deficit hyperactivity disorder, said today it’s cutting U.K. research jobs and will move its Swiss operations. About 180 employees at Shire’s U.K. headquarters in Basingstoke, England, may be affected, a spokesman said.

Separate from the research reorganization, Novartis plans to cut sales jobs in Frimley, England, because the company is ending marketing and sales support for products in diabetes and chronic obstructive pulmonary disease in the U.K.

To contact the reporter on this story: Eva von Schaper in Munich at evonschaper@bloomberg.net

To contact the editor responsible for this story: Phil Serafino at pserafino@bloomberg.net

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