Pfizer to Trim Fired Workers’ Benefits to Reduce Costs
Pfizer Inc. (PFE), the drugmaker that’s fired 26,000 workers in three years, is cutting its employee severance package after May 14, according to an internal memo.
The world’s biggest pharmaceutical company has been focused on trimming costs since it acquired Wyeth in January 2009. This year, Pfizer is wrestling with sales losses after its biggest product, the cholesterol drug Lipitor with $9.6 billion in 2011 sales, began facing generic competition for the first time.
Chief Executive Officer Ian Read, who took over in December 2010, has pledged to cut $1 billion from operations in 2012. The memo says basic severance pay will be lowered to eight weeks from 12 for U.S. workers, and that health benefits will last eight weeks rather than a year. Employees get additional weeks of pay and health insurance the longer they’ve been with the company. The memo was supplied to Bloomberg by a Pfizer employee, and confirmed by Joan Campion, a spokeswoman.
“Our benefits continue to be competitive when compared against those offered by our industry peers and other leading global companies,” the memo said. “We will continue to analyze all of our benefit programs to support our long-term competitiveness and the sustainability of benefits in today’s challenging business environment.”
Pfizer, based in New York, trimmed 20 percent of the combined workforce after acquiring Wyeth, Chief Financial Officer Frank D’Amelio said in an interview in January. In 2011, Pfizer cut $642 million, or 5 percent, from expenses, the company has said.
Other parts of the drugmaker’s employee severance package, including a 60-day notice and a $5,000 retraining program, will remain in place, according to the memo.
Pfizer shares fell less than 1 percent to $22.34 at the close of New York trading.
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