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Novartis to lay off 1,400 US sales reps

Novartis is laying off 1,400 US sales reps in its general medicines force to reflect changes in its product portfolio as a result of patent expirations and planned product launches
Novartis is laying off 1,400 US sales reps in its general medicines force, with effect from January 1, to reflect changes in its product portfolio being brought about as a result of patent expirations and planned product launches, the company said. 

The company expects to take a one-time charge of $85m as a result of the restructuring. Novartis said it will offer outplacement and other support services to the laid-off employees, as well as redeployment opportunities within the company where possible. 

The layoffs represent about 8 per cent of Novartis' full-time US workforce, which stood at around 18,500 employees at the end of last year. 

"Proactively evolving our business model will enable us to focus our resources on key launch products and capture opportunities in both primary care and speciality medicines," said Andy Wyss, head of Novartis Pharma North America and president of Novartis Pharmaceuticals.

Earlier this month, the company outlined a long-term strategy that involves focusing on pharmaceuticals, eye care, its Sandoz unit, consumer health, vaccines and diagnostics. Novartis said at that time that it expects its R&D investment to be "at the high end of industry over the next five years" and that it intends "to continue investments to scale up its businesses for long-term growth, especially in emerging markets, and plans to do so through freeing up working capital."

Among the major Novartis products that are facing patent expiration in the relatively near future are the hypertension drug Diovan (losartan) and the Alzheimer's disease drug Exelon (rivastigmine), both of which lose exclusivity in 2012. Meanwhile, the company recently said that it is planning to file at least 30 regulatory submissions for pharmaceuticals before the end of 2012.

The announcement of the layoffs at Novartis comes just days after rival firm Roche announced similar measures. Roche plans to cut 6 per cent of its global workforce, or 4,800 jobs, by 2012, including 2,650 positions in US sales and marketing.

1st December 2010

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