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Pfizer laying off 1,100 locally as it cuts R&D expenses

By Lee Howard

Publication: theday.com

Published February 01. 2011 10:13AM   Updated February 01. 2011 3:36PM
Abigail Pheiffer/The Day
Cars come and go at Pfizer's Groton campus on Tuesday, the day the company announced 1,100 employees would be laid off.

Pfizer Inc. will reduce its workforce in the region by 1,100 people over the next year and a half as its Groton campus shifts from a drug-discovery site to a support center for research and development, the company confirmed today.

The layoffs would leave the pharmaceutical giant with nearly 3,400 employees in Groton versus the 4,900 that Pfizer had at its two local sites about this time last year. The company said it currently employs about 4,500 people in Groton and New London and would be looking to transfer some of its workers to other sites.

About a quarter of the local Pfizer workforce will be cut, the company said.

"My heart goes out to the employees who lost their jobs," said Gov. Dannel P. Malloy in a statement. "There is no clearer evidence that we need to get our economy moving again than witnessing a large Connecticut employer laying off their workers and moving their business elsewhere."

"Today's unfortunate news from Pfizer – that it will eliminate more than 1,000 Connecticut jobs – reinforces the need to make job restoration priority one," added state Comptroller Kevin Lembo. "Employment growth is key in diminishing state spending on social services, and propelling state revenue."

Pfizer said the Groton lab's neuroscience and cardiovascular research units will be moved to Cambridge, Mass., as part of a new strategy to boost innovation and address productivity issues. Groton's antibacterials unit also will be moved.

The Groton campus, which will be Pfizer's sole local site when the company vacates its former world research headquarters in New London by the end of this year, will focus on such specialized areas as drug safety, pharmaceutical services, clinical trials, clinical research, drug-target selection, chemistry and the study of how drugs work in the body, the company said. A solid-dose manufacturing facility also will be retained locally.

The region, which housed the Pfizer Global Research and Development headquarters in New London before a previous restructuring led to the office complex's sale last year to Electric Boat, will now be home to the Groton-based Center of Excellence for Discovery and Development Sciences.

"These were difficult decisions," said Kristen Neese, a Pfizer spokeswoman, in a phone interview. "Groton will remain the largest of our R&D sites and will be a center of excellence for R&D services."

The layoffs are part of Pfizer's plan to reduce its research-and-development expenses by up to $2 billion beyond what it previously announced in the coming year. The company, which spent $9.4 billion on R&D last year, could reduce its expenses to as little as $6.5 billion this year.

The layoff announcement came as Pfizer released its fourth-quarter financial results.

"This is not a reflection on the colleagues in Groton," Neese said in a statement. "We are proud of our talented colleagues who have contributed to the development of many important medicines including the antibiotic Zithromax, the antidepressant Zoloft and the smoking cessation medicine Chantix."

"We are keenly aware of the impact of these changes will have on our colleagues as well as the local communities that are impacted," Neese added. "We are committed to treating all colleagues with the utmost respect throughout this process, and to making sure that everyone is informed in an honest, thoughtful and prompt way."

Tony Sheridan, president of the Chamber of Commerce of Eastern Connecticut, said he was somewhat relieved by the announcement given that he had been hearing rumors that the entire Pfizer operation would be shutting down in southeastern Connecticut.

"The pressure is on to develop more targeted medications," Sheridan said. "That's the direction the industry is going."

Jim Streeter, mayor of the Town of Groton, said local leaders had been warned that Pfizer would be downsizing. He said officials had asked if there was anything the town could do to change the company's mind or had done anything that made Pfizer want to leave.

"They said absolutely no, this was a business decision that had to be made," Streeter said.

State Rep. Edward E. Moukawsher of Groton said he didn't think the downsizing would have a major effect on the town's tax collections, which are heavily dependent on Pfizer. But he said the town needs to take a hard look at the future of property taxes and the grand list in case Pfizer's pullback continues.

"It seems like they've been adjusting to scale forever," he said.

As part of its downsizing, Pfizer is planning to close its site in Sandwich, England, shifting some resources to Cambridge, Mass., and outsourcing certain functions.

Pfizer chief executive Ian Read said in a conference call that the company will abandon low-profit research areas such as allergy, urology, respiratory, internal medicine and tissue repair.

"Our late-stage pipeline needs to come through, and I'm optimistic," said Read, as quoted online by Business Week.

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