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    Tuesday, March 05, 2024

    What’s Going on: COVID hangover hangs over Pfizer

    A Pfizer sign is seen out front of the Pfizer Research & Development Laboratories Wednesday, July 22, 2020, in Groton, Conn. (AP Photo/Stew Milne)

    Pfizer Inc. is starting to roll out the pharmaceutical company’s biggest round of layoffs since 2009, and its Groton laboratories are not immune.

    Of course, New York-based Pfizer these days never comes out and says how many layoffs will occur in Groton, so we are left to guess at the numbers. But in October Pfizer said financial cuts company-wide would amount to $3.5 billion by the end of next year, and in a follow-up third-quarter conference call officials made it sound like many of those reductions would be aimed at facilities involved in COVID-19 vaccine development and production.

    “The COVID part is going to be the biggest part,” Albert Bourla, Pfizer’s chairman and chief executive officer, said in the Halloween conference call, in response to a question about where cuts will be targeted.

    Of course, Pfizer’s Groton labs were directly involved in much of the company’s COVID vaccine development. At one point in March 2021, Groton site leader John Burkhardt told me that about 200 scientists were working on developing the initial Pfizer COVID vaccine out of about 2,600 direct employees there.

    The labs were involved in molecular-level studies of the world’s first mRNA vaccine as well as the planning, designing and executing of drug trials and analysis of the results. Groton scientists also oversaw trials of vaccine booster shots against new variants, and local facilities helped produce lipids used in the delivery of vaccine doses.

    Speculation is rampant that with Pfizer’s COVID remedies faltering, the Groton labs will be hit hard, perhaps in the range of the 200 layoffs already announced in Kalamazoo, Mich., and hopefully fewer than the 500 expected in Sandwich, England. One Pfizer site in Peapack, N.J., is being shuttered entirely, but no such drastic measure is expected in Groton, despite the company’s decision to close its New London research-and-development headquarters a few years ago and move it to Cambridge, Mass.

    The most I could get out of the company was that the cuts were being done to increase efficiency, and that they would occur on a rolling basis, involving “some job loss across a number of our locations, including Groton.”

    OK, there was a little more, but not really much of anything. Unlike in 2011, when Pfizer announced publicly a reduction of 1,100 employees in Groton, the company lately has been steadfastly refusing to share local layoff details.

    Groton City Mayor Keith Hedrick said he found this lack of communication to be problematic.

    “My concern is people tend to panic,” he said, meaning people assume the worst when they don’t know anything.

    Some people are longing for the “glory days,” he said, when Pfizer was manufacturing penicillin locally. But he knows those days of stability and local focus are over, and “Pfizer is going to do what Pfizer is going to do.”

    Still, he rightly believes that a multinational corporation like Pfizer shouldn’t feed into the rumor mill by keeping people in suspense. And I will add that Pfizer also shouldn’t try to lie, as officials did in a meeting with me and other Day journalists years ago after columnist David Collins speculated about the possible closure of the New London R&D headquarters, when they flatly denied a closure was imminent (a year or so later it came to pass).

    Pfizer rightly holds an honored place in southeastern Connecticut’s business climate, and the men and women who contributed their talents to create the world’s first vaccine to fight COVID should be held in high esteem. In fact, I’m surprised a parade in their honor hasn’t already been contemplated.

    But the city needs to plan ahead for the tax consequences in case these layoffs are accompanied by demolition of buildings, as occurred a decade ago when Pfizer decided to take down its massive former research headquarters known as Building 118. Real estate agents would no doubt like to know the impact as well, given that the last major round of Pfizer layoffs here led to a dramatic lowering of home prices.

    With luck, and thanks to a bit more diversification in the local economy with the addition of the wind industry, a renaissance in New London and a boom at Electric Boat, the effect this time around likely will be minimal.

    As Tony Sheridan, chief executive of the Chamber of Commerce of Eastern Connecticut, said, “Thank god for EB. ... On the whole, eastern Connecticut is doing great.”

    Lee Howard is The Day’s business editor. To reach him, email l.howard@theday.com.

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