Wednesday, July 30, 2014

Despite growth, Amgen announces restructuring plan

Amgen announced a restructuring plan to invest in continuing innovation and the launch of its new pipeline molecules, while improving its cost structure. Initial efforts include streamlining the organization, reducing layers of management, increasing managerial spans of responsibility and beginning implementation of a revised geographic site plan.

As a first step, the Company will reduce staff by 2,400-2,900, beginning later this year and continuing through 2015, predominantly in the U.S. This represents approximately 12 percent to 15 percent of Amgen's global workforce. The company announced it will close its facilities in the states of Washington and Colorado.

"The talented staff members at these locations have made enormous contributions to advancing biotechnology over the years and the surrounding communities have been very supportive, so it is with great reluctance that we acknowledge the need to exit," continued Bradway. "At each site, we are actively engaging in discussions with third-parties about potential future use of the facilities."

However, Amgen intends to expand its presence in the biotechnology hubs of South San Francisco, Calif., and Cambridge, Mass. It will retain its headquarters in Thousand Oaks, Calif, but with a reduced number of staff consolidated into fewer of the existing buildings.

These actions will result in an approximate 23 percent reduction in Amgen's facilities footprint.

The combination of these efforts will reduce operating expenses by approximately $700 million in 2016 compared to 2013, although most of the savings will be reinvested to support global launches of new products.

As a next step, Amgen is evaluating additional efficiency initiatives, particularly in the area of shared services and other external expense categories to support its growth objectives.


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