Sankyo planning to cut 1,000 jobs

Having posted a disappointing set of results for the fiscal year endedMarch 2001 (Marketletter June 4), Sankyo of Japan is to set up a task force looking at corporate reform and will cut its workforce by 15% over the next five years, according to the Nikkei News Service. 1,000 of the 6,500 employees at the company will be affected, leading to savings of 20 billion yen ($167.7 million) over the five-year period, and the firm said that the cuts will come through natural attrition, early retirement and reduced recruitment of new graduates.

The task force, which will be headed by company president Tetsuo Takato, will begin operations on July 1, and Sankyo is hoping to save around 90 billion yen in costs by the end of March 2006. Mr Takato added that the firm will continue to aggressively invest in R&D, adding that its spending in that area will be at around the same level as the last fiscal year (78.7 billion yen), although its focus has been narrowed to concentrate on diseases linked to metabolic and bone problems, the immune system and allergies.

The cost-saving moves come in the wake of diminishing sales of the lipid-lowerer Mevalotin (pravastatin), both in Japan and the USA, and the rising cost of research. Sankyo expects turnover from the drug to fall from 163.7 billion yen for the current fiscal year to 94 billion yen in five years' time, as the result of patent loss and the continuing growth in sales of Pfizer's Lipitor (atorvastatin).