Pfizer acquisition of Wyeth results in thousands of job losses

Pfizer, the world’s biggest drugs firm, is to buy rival Wyeth in a deal worth $68 billion (£50 billion).

Pfizer which produces Viagra, is to buy Wyeth in a cash-and-stock deal valued at $50.19 a share. The deal will help Pfizer diversify its product portfolio, due to Wyeth’s presence in biotech drugs and vaccines.

The new combined group is set to create a pharmaceuticals giant with annual sales of approximately $75 billion. Some analysts believe that the announcement will trigger a long-predicted wave of consolidation in the industry.

Furthermore, the deal will allow Pfizer to protect itself from an expected decline in revenue next year, when its popular drug Lipitor cholesterol treatment and other products lose patent protection.

In addition, Wyeth will see the same problem in 2010 when it loses patent protection on its best-selling drug, anti-depressant Effexor XR.

The deal is the biggest merger in the pharmaceutical industry since Pfizer bought Warner-Lambert in 2000 for $93.4 billion.

The two companies employ around 6,500 people in the UK.

However, the newly-formed group comes at a high price to employees with Pfizer planning to eliminate 8,000 jobs, or 10% of its workforce as it plans to shut five factories.

Jeff Kindler, Pfizer’s chief executive, described the job losses as ‘difficult and painful but very necessary‘ as a result of a slowdown in sales.

The job losses add to the tens of thousands announced today already across Britain, Europe and the US.

Electronics retailer Philips is axing 6,000 jobs globally as consumers continue to tighten their purse strings and delay buying non-essential items.

Meanwhile, construction equipment maker Caterpillar based in Illinois, is shedding nearly one-fifth of its workforce (20,000) as it is hit by the severe downturn in the global construction industry. The announcement has raised concern among the company’s 10,000 employees in the UK.

Meanwhile, upper class retailer Fortnum & Mason has today announced redundancies, while Britain’s largest steelmaker, Corus, is planning 3,500 job losses, with 2,500 in the UK.

Dutch financial group ING announced this morning it is to cut its workforce by 7,000, which represents 5.4% of its 130,000.

Finally, High Street footwear retailers Barratts Shoes and Priceless Shoes called in the administrators today in a bid to save them from collapse.

The news puts over 5,000 jobs at risk in the UK.

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