Pfizer confirms layoffs coming in Groton
Groton ― Layoffs at Pfizer Inc.’s laboratories off Eastern Point Road are expected to start soon.
Pfizer on Thursday confirmed it would be laying off employees as part of a $3.5 billion worldwide downsizing that will roll out in stages over the next few months. Already, Pfizer has announced layoffs numbering 300 in Kalamazoo, Mich., and 500 in Sandwich, England, in addition to plans for closing a facility in Peapack, N.J., that could affect hundreds more.
But Pfizer would not share any numbers on the job impact in Groton. In the past, the company has laid off personnel in small batches to avoid the necessity of filing a notification with the state Department of Labor.
“Pfizer has launched an enterprise-wide cost realignment program. Various areas of Pfizer’s global enterprise are making changes to operate more efficiently and effectively,” the company said in a statement.
“These changes will be implemented on a rolling basis and will differ area to area. Part of the effort will result in some job loss across a number of our locations, including Groton.”
The company added, “Pfizer does not take these changes lightly. All decisions that impact people, processes and initiatives will be made with transparency, compassion and respect.”
This would be the biggest layoff round for Pfizer since an eight-year period ending in 2012 that culminated in more than 30,000 employees losing their jobs worldwide, including about 3,000 locally. Those layoffs were largely the result of consolidations after Pfizer acquired several major competitors, including Wyeth.
In this case, Pfizer officials are blaming the layoffs largely on weakening sales for its COVID-related drugs, including Paxlovid. The company said it overestimated these drug sales by about $9 billion.
“Total company full-year 2023 revenues are expected to be in the range of $58 billion to $61 billion versus the previous range of $67 billion to $70 billion,” Dave Denton, Pfizer’s chief financial officer, said in an Oct. 31 earnings conference call, according to a transcript.
Pfizer’s stock has steadily declined in recent weeks, and is down 40% so far this year. Other pharmaceutical companies have been hit hard this year as well, with layoffs announced at Biogen, Johnson & Johnson and Merck, among others.
Groton City Mayor Keith Hedrick said Thursday that he started hearing about Pfizer layoffs a few weeks ago and met last week with company officials, who assured him the reduction in numbers did not portend a site shutdown, which is what occurred to the company’s World Research & Development Headquarters in New London in 2009. Groton is still considered one of Pfizer’s Centers for Excellence in Drug Development.
“Pfizer is still committed to the Groton site,” Hedrick said Pfizer officials told him.
Hedrick said he worried after hearing Pfizer’s 260 Building on the east side of the campus was going to be emptied in a consolidation effort, but he was told the company had plans to lease or sell the building. His concerns were further alleviated, Hedrick said, when he heard about plans for future projects at the Groton site, including the conversion of an administrative space into laboratories.
“Sad as it is,” Hedrick said about the impending layoffs, “I don’t have any indication there will be a large negative impact.”
When Hedrick and Groton Town Manager John Burt met with Pfizer officials, Hedrick said they were told no final decisions had been made on the Groton site, and they refused to talk about what groups of scientists might be let go or how many would be laid off.
“They really were not informative,” Hedrick said. “It was pretty nebulous and arbitrary.”
Tony Sheridan, chief executive of the Chamber of Commerce of Eastern Connecticut, said Thursday that Pfizer’s business has been up and down in the past and that he believes the company might have developed such a singular focus on the COVID epidemic that officials perhaps failed to keep an eye on the rest of its pipeline.
“They did such an amazing job with COVID,” he said. “They put all of their energy in responding to COVID-19.”
Pfizer said it is expecting to realize $1 billion in savings through various cost-saving measures this year, with another $2.5 billion expected in 2024. It said in an October news release that the one-time costs of the “realignment program” would be about $3 billion, mostly for severance and the cost of implementation.
According to a Nov. 2 report in the industry blog FiercePharma, recent Pfizer cuts include 69 layoffs over the summer in Illinois, an undisclosed number in Boulder, Colo., in October, and the planned closure of two facilities in North Carolina. Operations in Ireland have also been disrupted.
Employees have been critical of the cuts. FiercePharma cited comments on the social media platform Reddit during a livestream session Pfizer officials held with thousands of employees in which the “casual” tone of announcing the layoffs was not received well.
One anonymous poster commented, “This webcast seemed like they invited everyone to say, ”Hey thanks for working so hard, but don’t let the door hit you on the way out.”
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