Pfizer's next layoff packages shrink
Pfizer Inc. personnel being laid off at the company's Groton laboratories after May 14 will receive less money than previous waves of departing workers have received.
Pfizer, at the tail end of a planned 1,100 layoffs locally, said in a memo released last week that in the future people leaving the company will receive eight weeks of severance in addition to two weeks for every year served with the company. The pharmaceutical giant had previously offered at least 12 weeks of severance to employees, and before acquiring Wyeth Pharmaceuticals in 2009 had handed out three weeks of pay for every year served.
"Our benefits continue to be competitive when compared against those offered by our industry peers and other leading global companies," an internal Pfizer memo published first by Bloomberg.com said. "We will continue to analyze all of our benefit programs to support our long-term competitiveness and the sustainability of benefits in today's challenging business environment."
In addition to the pay differential, Pfizer said it will be reducing post-separation health benefits, making medical-insurance payments for only eight weeks. Previous layoffs had offered a full year of medical coverage.
The severance packages will continue with practices that include a 60-day layoff notice and retraining support of up to $5,000.
"The move comes as the drugmaker considers selling or spinning off its animal health and nutrition businesses, which would likely involve eliminating still more jobs," commented Ed Silverman in his blog Pharmalot. "The cuts, by the way, also come after the Pfizer board gave CEO Ian Read a big pay hike last year."
Bloomberg pointed out that Pfizer has laid off about 26,000 people in the past three years. The company moved out of its former worldwide research-and-development headquarters in New London last year and announced it was reducing its workforce in Groton from 4,600 people to about 3,500.
The cuts are part of a planned $1 billion cut in Pfizer's R&D budget this year. The reductions are partially in response to Pfizer's lost patent exclusivity on its blockbuster medication Lipitor, which last year accounted for about $10 billion of the company's worldwide sales of $67.4 billion.
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