Markets

U.S. open in 54 hrs, 13 mins

DJIA

12,986.80

-5.86

0.05%

NASDAQ

2,528.85

-4.88

0.19%

S&P 500

1,425.35

1.78

0.13%

10yr Note

100.219

0.00

0.00%

FTSE 100

6,304.30

52.50

0.84%

Nikkei 225

14,219.48

-32.26

0.23%

Hang Seng

25,618.86

105.09

0.41%

Euro (in USD)

1.558

0.0138

0.89%

Yen (per USD)

104.06

-0.62

0.59%

Oil

126.04

2.19

1.77%

Gold

899.90

19.90

2.26%

BUSINESS NEWS

INVESTING

PERSONAL FINANCE

SMALL BUSINESS

Merck to cut 1,200 sales jobs following regulatory setback

By LINDA A. JOHNSON,

Posted: 2008-05-05 18:02:06

TRENTON, N.J. (AP) - Merck & Co. said Monday it is eliminating 1,200 U.S. sales jobs, a move that comes a week after federal regulators' surprise rejection of an experimental cholesterol drug heavily touted by the pharmaceutical company.

The cuts come on top of the elimination of about 8,100 positions under the sweeping restructuring plan announced in December 2005, Merck's so-called Plan to Win.

The new cuts are to be completed by the end of July, with employees of the Whitehouse Station, N.J.-based company being notified by the end of this month.

"It isn't a message that you want to send," said WBB Securities analyst Steve Brozak. "If they didn't have a morale problem now, they certainly will."

Merck shares fell 39 cents to $38.97 in regular trading Monday, then rose 39 cents to $39.37 in after-hours trading.

The cuts amount to nearly 15 percent of the 8,500 sales jobs Merck had at the beginning of 2007, spokeswoman Amy Rose said.

"It's really attributable to a number of things," she told The Associated Press.

Those include the Food and Drug Administration's rejection last Monday of a new cholesterol drug called Cordaptive that Merck had hoped would reinvigorate its key cholesterol franchise. In addition, Rose said, Merck has successfully completed the launch of eight medicines and vaccines in the United States since 2006 and now is scaling back the number of salespeople devoted to those drugs.

Kenneth Frazier, president of Global Human Health at Merck, said in a statement that the step is part of continuing efforts to improve the company's effectiveness and efficiency across its business.

Merck isn't the only drugmaker letting sales representatives go.

At the end of March, Madison, N.J.-based Wyeth let go 1,200 sales reps as sliding sales of former blockbusters make many reps redundant. And late last month, health care giant Johnson & Johnson of New Brunswick, N.J., said it is eliminating about 400 U.S. sales jobs by year's end, due to sales of a key drug being hurt by safety problems.

Merck has been enduring a string of setbacks over the past 11 days, including the FDA rejecting the company's proposed allergy drug that combined the active ingredients of Merck's Singulair and Schering-Plough Corp.'s Claritin, which is available without prescription. Last Wednesday, FDA publicly demanded the company clean up problems at its main vaccine plant.

Brozak said such problems, besides wearing on investors' patience, could lead to a bunker mentality among staff that limits long-term strategizing.

"This is like watching a soap opera," he said, adding, "If anybody has a track record of turning things around, it is these people."

On the Net: www.merck.com

Copyright 2008 The Associated Press. The information contained in the AP news report may not be published, broadcast, rewritten or otherwise distributed without the prior written authority of The Associated Press. Active hyperlinks have been inserted by AOL.

05/05/08 18:01 EDT

Must Read?

0 %

0 VOTES

Recent Comments

Post Your Own

1 - 10 of 21

21 comments

GeorgiaALA 04:39:27 AM May 06 2008

Report This!

So let's see here. Merck doesn't get its way so, in retalition, they punish the low level employees.
Isn't that very convenient? It's like corporate blackmail.

Kamdajani 01:39:55 AM May 06 2008

Report This!

THEY KEEP CUTTING JOBS AND THE GOVERNMENT COUNTS THEM PLUS SHOWING UNEMPLOYMENT FIGURES LESS!

PAULLEONE 01:13:44 AM May 06 2008

Report This!

The Washington D.C. PAC HACKS will never let Chinese automobiles into the USA. They are paid off by Detroit's car builders not to let them in. Imagine a complete/competing car for 1/4 to 1/2 the retail price of Big 3s competition!!!

Kamdajani 01:13:34 AM May 06 2008

Report This!

MERCK SHARES MUST DIVE TO 3 DOLLARS SOONER OR LATER THEY GOT BILLIONS OF DOLLARS TO PAY FOR LAW SUITS

Jamcarr3 12:33:05 AM May 06 2008

Report This!

THEY KEEP CUTTING JOBS HERE AND ADDING THEM IN CHINA AND MAKE VERY POOR MEDS NOW THAT FDA IS BEING WATCHED COMPANIES LIKE THIS BETTER JUST CLOSE DOORS NO MORE BRIBES,TRIPS,HOOKERS FOR FDA

Scifiwil 12:31:53 AM May 06 2008

Report This!

You know its pitiful that American Industry always reacts by eliminating jobs, especially those who can least affoerd it. I'll bet that senior management will still get their bonus this year. Or is all this an early response to the future democratic administration. You think Merck would've done the right thing and cleaned up their act. But its the typical response of big companies, they are like petulant children when they don't get their own way. Its pretty sad.

Tprochko 10:27:56 PM May 05 2008

Report This!

What would George Merck say?

HarleyDesigns 10:04:52 PM May 05 2008

Report This!

Jfoster520 09:56:57 PM May 05 2008
......... It kills me to see all these democrats complaining about the poor union labor. Their $15 dollar an hour job. Heck, a welder in the oil business makes 100k per year. People make a good living. Why beat down industry that makes ALOT of Americans ALOT of money. There is not some guy named Merch making all the money. There are thousands of stock owners and alot of "well paid" employees.

Fair enough. So how many cuts to the board pay and compensation was made to save the company? or are the board members "exempt from regular employment and business rules"?

Jfoster520 10:03:00 PM May 05 2008

Report This!

I keep seeing people post that there are no jobs and the unemployment is really bad. Well the unemployment rate is one of history's lowest and it amazes me that 20 million illegial aliens are in this country working and everyone says there are no jobs. Looks like there is really about 20 million too many jobs. Can you see the stupidity of political BS.