Eli Lilly and Company announced actions to streamline operations to more efficiently focus resources on developing new medicines and to improve its cost structure.
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Global workforce reductions, including those from a U.S. voluntary early retirement program, are expected to impact approximately 3,500 positions.
With the streamlining efforts announced, the company expects annualized savings of approximately $500 million that will begin to be realized in 2018.
These initiatives are part of a broad productivity plan underway at the company to improve its cost structure, particularly fixed costs.
Lilly expects the majority of the positions eliminated to come from a U.S. voluntary early retirement program, which is being offered to employees who meet certain criteria.
Those who participate will receive enhanced retirement benefits. The program, announced to U.S. employees on September 7, 2017, will be largely completed by December 31, 2017.
Remaining positions will come from other anticipated workforce reductions, including select site closures.
The company will move production from its animal health manufacturing facility in Larchwood, Iowa, to an existing plant in Fort Dodge, Iowa, and continue productivity improvement efforts around the world.
In addition, a research and development office in Bridgewater, New Jersey, and the Lilly China Research and Development Center in Shanghai, China, will close as the company streamlines its pharmaceutical research and development activities. The company will also further consolidate some work to its existing shared service centers.
In addition to the U.S. voluntary early retirement program, the company will determine where it needs to further reduce costs and improve efficiencies.
These efforts will include evaluation of necessary adjustments to the workforce, with the goal of continued investment in new medicines and growth.
All streamlining efforts will be consistent with applicable local requirements. ■