US company Allergan has announced a comprehensive program to streamline and control costs, through cutting around 450 jobs (of 6,000 worldwide) and special pretax charges of up to $75 million. According to analysts, Allergan's decision to cut jobs and streamline operations is part of an effort to refocus on internal efficiencies that have been somewhat neglected for the past year.
It has also been noted that the timing of the restructuring, coming just weeks after merger talks with Pharmacia & Upjohn fell through (Marketletter May20), has led to initial speculation that Allergan is "window dressing" before the next suitor. However, the company claims the cuts have been scheduled for some time. Ken Abramowitz of Sanford C Bernstein noted that Allergan is trying to downsize as it absorbs acquisitions. It has made eight purchases since November 1992 at a cost of about $250 million. These boosted sales but have also added overhead costs.
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