Pfizer to lose 20% of US sales force as it cuts costs

Pfizer plans to cut 20% of its 11,000-strong US sales force. The move is part of its plan to save $4.0 billion in operating costs by 2008, as the world drug giant braces itself for a wave of costly patent expirations (Marketletter April 11, 2005).

Company spokesman Paul Fitzhery could not tell the Associated Press how much money Pfizer would save by losing these 2,200 jobs or whether the firm would incur any immediate charges. The market reacted positively to the move and, on the day of the announcement, November 28, shares in New York-headquartered Pfizer rose $0.08 to close at $27.05.

Across the entire industry, cost-cutting has come to the fore as growth rates slacken and patents are due to expire on key performance drivers. Swiss bank CSFB sees considerable room for "self-healing" in the industry, with perhaps as much as 25%-30% of expenditures being slashed from distribution and marketing budgets.