Merck & Co has decided to relocate its global headquarters to a different site in New Jersey as part of its ongoing programme to slash costs and consolidate real estate assets.
The pharma company will close down its building in Whitehouse Station, which has served as Merck’s global HQ since 1992, and shift operations east to its site in Summit.
The closure is the latest measure taken by Merck as it rationalises its corporate structure after acquiring Schering-Plough for $50bn in 2009. The transfer process will start in 2014 and is expected to complete sometime the following year.
The company – which set itself the target of cutting 17,500 positions in 2010 after the merger – stressed that no additional job losses would result from the move, and has provided no indication of the cost-savings it hopes to gain.
“The Summit location was selected as the site for Merck’s new headquarters because it is a strategic, multi-use site with excess work-space capacity and is adjacent to major transportation hubs and desirable urban centres,” said the company in a statement.
Summit currently houses research, manufacturing, animal health and consumer care operations and accommodates 1,800 workers. About 2,000 employees and contractors currently at Whitehouse Station will move to Summit – which is around 30 miles away – or to nearby facilities.
“The relocation of our headquarters will help us achieve our future vision, reduce the size of our operating footprint, and increase agility as we adapt to our changing business environment,” said Merck chief executive Kenneth Frazier.
Like many of its peers in the pharma sector, Merck is being squeezed by the weak economy, government mandated price cuts and the exposure of former blockbuster brands to generic competition.
In August, for example, the FDA approved the first generic versions of Merck’s $5.5bn asthma and allergy drug Singulair (montelukast), which is currently the company’s top-selling brand.