Thursday July 26, 05:26 PM
AstraZeneca to slash 7,600 jobs as profits fall
By Ben Perry
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LONDON (AFP) - The Anglo-Swedish pharmaceuticals giant AstraZeneca (LSE: AZN.L - news) said Thursday that it would cut 7,600 jobs by 2010, more than double an original estimate, as it posted a fall in second-quarter net profit.
AstraZeneca intends to cut about 12 percent of its global workforce over the next two and a half years as part of a major restructuring programme which will now cost 1.6 billion dollars (1.2 billion euros), more than triple an initial forecast of 500 million dollars.
The group, which produces the cholesterol treatment Crestor and breast cancer medicine Arimidex, said in February that it planned to axe 3,000 jobs as it looked to boost profits amid a growing threat from generic drugs makers.
In a company statement published Thursday, AstraZeneca said its net profit dropped by 10.8 percent to 1.426 billion dollars during the second quarter from the same period a year earlier.
Profit was hit by the start of its restructuring programme and costs related to the acquisition of US biotechnology company MedImmune (NASDAQ: MEDI - news) for 15.6 billion dollars earlier this year.
AstraZeneca added that group sales grew by 9.8 percent to 7.273 billion dollars in the three months ended June 30, compared with the second quarter in 2006.
"In February, the company announced a three-year programme to improve asset utilisation within the global supply chain," AstraZeneca said in its earnings statement.
"Since that announcement, the company has identified, and the board has approved, additional initiatives ... The aggregate cost of all of these programmes, including an expanded scope to the supply chain programme, is estimated to be 1,600 million dollars, of which 458 million dollars has been charged to the first half results."
The company added: "When fully implemented, the net reduction in positions will be around 7,600. The annual benefit when these programmes are complete is expected to be in excess of 900 million dollars in 2010 at current rates of exchange."
The share price of AstraZeneca closed on Thursday at 2,592.00 pence, down 3.14 percent.
London's FTSE 100 (news) index of leading shares, on which the group trades, tumbled by 3.15 percent to 6,251.20 points, mirroring heavy falls across world stock markets.
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