Pharma giant Merck is laying off 20% of its workforce less than 3 months before Christmas. The company is looking to save around $2.5 billion in operating costs until 2015 and appease investors.
The cuts will happen worldwide and companywide. Merck's labor force is at 81,000 in total, 11,700 of which are stationed in Pennsylvania (West Point and Upper Gwynedd). The company was quick to deny speculations that recession is triggered by the pending Obamacare discussions before the congress. They are also expected to pay between $2.5 billion and $3 billion in pre-tax fees.
According to reports, job cuts will be concentrated in sales, general and admin, and a few with research and development. Merck will focus on their target markets (Japan, China, France, Germany, United Kingdom, Brazil and Russia) to provide vaccines and treatments for certain types of cancer.
Experts are not seeing much value proposition with this move, citing Merck rivals Pfizer and Bristol Myers still have better chance at the market. Drug companies share the same woe and pressure to discover breakthroughs that can fuel their engine to outrun competitors.
At present, Merck's headquarters is located in Whitehouse Station in New Jersey. Together with the lay off announcement is the confirmation that they will move their central office to Kenilworth, New Jersey - which is significantly nearer to New York City.
Seems like a bad streak was started by the government shutdown closing national parks and furloughing more than 800,000 federal employees.
On a flipside, Amazon is looking to hire more than 70,000 seasonal workers as holiday season approaches. They are forecasting demands to ramp up in the next there months.
While these are contrasting realities at the business realm, there is a bigger issue to resolve - a wrangling political situation in Washington that can erode confidence of economy's prospect.
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