MASSIVE ASTRAZENECA LAYOFF: ASTRAZENECA to CUT 15000 JOBS by 2013

Astrazeneca Job Layoff

Astrazeneca is a global leading Pharmaceutical company which has presence in over 100 countries. It has about 67,000 employees worldwide - according to their website - with 55% in Europe, 30% in the Americas and 15% in Asia, Africa and America. Astrazeneca had announced on Nov 20 that it would cut 1,400 jobs and close three European factories in Spain, Belgium and Sweden as part of its cost cutting exercise. Astrazeneca then revised this number and said that it would layoff 15000 jobs by 2013.

Reasons for Job Lay off and Investor reaction

Astrazeneca has seena 1.4% decline in profits in the fourth quarter of 2008, as compared to the same quarter previous year. Astrazeneca expects sales in 2009 to be at the same level as of 2008 - i.e. NO GROWTH in 2009. Despite the above cost cutting measures, the stock of AstraZeneca is down by over 6% as I write this post. The announcement has come just minutes ago. The reason for the downward movement in the stock is probably worse than expected quarterly results.

What does the Job Lay off mean for you and me?

This is perhaps the first major Pharmaceutical company to feel the brunt of the recession. The Pharma and FMCG sectors are exepected to be somewhat robust sectors which are relatively less affected by slowing economy. Although the number 1.4% may not look a big number, the fact that a Pharma company is being affected is significant here. Also what surprises me is that the Job layoff is expected to take place by 2013. Doesn't Astrazeneca expect situation to get better by then?
sources:marketwatch, BBC