Roche plans job cuts, announcing Operational Excellence initiative

Confirming earlier speculation about job cuts, Swiss drug major Roche (SIX: ROG) last Friday announced the launch of a group-wide 'Operational Excellence' initiative, although at this stage it did not detail where and when these would occur.

The company - which saw its share price rise1.7% to 142 Swiss francs on the news - said that, in view of mounting pressures to curb health care costs - especially in the USA and Europe - together with recent developments in late-stage projects in the Roche pipeline, this initiative aims to adapt cost structures and accelerate productivity improvements Group-wide.

Severin Schwan, chief executive of Roche, commented: 'We have launched this initiative from a position of strength. By contrast with many of our competitors, we are only marginally affected by patent expiries. Furthermore, despite the recent setbacks, we have one of the strongest R&D product pipelines in the industry. We will focus our resources towards investments that will drive innovation and ensure the company's long-term success, while at the same time protecting our profitability so as to safeguard our financial flexibility. Roche also confirms its full-year outlook for 2010.'