Roche To Restructure, Lay off 4,800

Roche has announced restructuring plans in the wake of numerous pipeline disappointments and setbacks with existing products following its Genentech acquisition. The company plans to reduce its staffing by 6%, with layoffs and unfilled positions adding up to 4,800 jobs. Roche will also cancel some development programs, shrink others, shift 800 workers to other sites and outsource an additional 700 roles. The total number of affected positions will be 6,300. The moves are intended to provide savings in excess of $2.0 billion by 2012, but will cost $2.4 billion to implement.

Roche Group’s chief executive officer, Severin Schwan, said, “These measures are necessary to ensure sustained success of the company. We will make every effort to find socially responsible solutions for the employees affected.”

Sales and marketing jobs will account for 2,650 of the layoffs, and are due largely to setbacks in the company’s developmental diabetes drug taspoglutide. Technical operations will be reorganized, accounting for another 750 jobs lost, and the company intends to sell sites in Florence, SC and Boulder, CO. The Florence site is dedicated to process development and bulk manufacturing of APIs. The Boulder facility is dedicated to peptides manufacturing and conducts third-party work.

In development, Roche plans to discontinue R&D in some areas, including RNA interference (RNAi). R&D cuts will constitute 600 job losses. The company also plans to close is Diagnostics site in Graz, Austria and its Diabetes Care facility in Burgdorf, Switzerland.