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Parexel to axe up to 850 jobs in restructure

The CRO said it also expects a $45m charge associated with the changes

ReserachContract Research Organisation Parexel has announced major cuts across its global businesses as it seeks to battle 'headwinds' in the coming year.

The US-based firm said it expects to cut as many as 850 jobs in a heavy restructuring programme starting from this year and ending mid-2016.

The cuts will affect positions around the world as it looks to save money in the longer term and comes as it deals with a drop in revenue.

The CRO provides clinical and other services to the pharmaceutical industry but said it has been facing headwinds in recent years. This comes as R&D activity has declined across the board in the industry, with fewer firms using CROs as companies look to save money, and move into a more collaborative R&D model with charities, academic centres and smaller life science firms. 

Josef von Rickenbach, Parexel's chairman and CEO, said: “We are accelerating a number of our ongoing improvement plans, and as a result of these efforts, plan to restructure certain activities.”

He said that these changes will help: “Strengthen the company by increasing our competitiveness in the marketplace, and will help us to deliver long-term sustainable growth in revenue and margins.”

He added: “Our priorities for the new year include solid revenue growth, as well as improved operating profitability and double-digit growth in earnings per share.”

But in the short-term the company is set to take a charge of between $35m - $45m for the redundancies and now expects sales to be between $2.010bn and $2.026bn - down from its prior range of $2.012bn to $2.032bn.

In longer term however the firm said in a statement that it expects to achieve annual pre-tax savings as a result of this charge of between $20m to $30m over the course of 2016.

Article by
Ben Adams

26th June 2015

From: Sales

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