Thousand Oaks-based pharma big Amgen Inc. mentioned it might lay off roughly 450 staff, or practically 2% of its workforce, the second such layoff spherical this yr.
In asserting the layoff spherical, Amgen cited the specter of strikes in Washington D.C. to restrict will increase in, and even cap, drug costs, in addition to persevering with inflation.
“We made these adjustments to realign our expense base within the face of intensifying stress on drug costs and excessive ranges of inflation in order that we will proceed to ship worth for our sufferers, employees and shareholders,” Amgen mentioned earlier this month in asserting the transfer.
Beneath federal regulation for any layoff spherical exceeding 50 staff, Amgen was required to provide 60-days’ discover to each the affected staff and state authorities, that means the precise layoffs received’t happen till mid-Might.
In mid-January, Amgen introduced it was shedding roughly 300 staff – totally on the industrial aspect of its enterprise; at the moment, the corporate mentioned it made the transfer “to raised handle towards business headwinds.”
An Amgen spokeswoman gave no particulars about which components of the corporate’s enterprise the present spherical of layoffs can be concentrated in.
In accordance with Amgen’s annual 10-Ok submitting with the Securities and Change Fee, the corporate reported having a complete of 25,200 staff in additional than 50 international locations worldwide as of Dec. 31. The spokeswoman mentioned the present workforce stays “above 25,000” even after the primary spherical of layoffs.
Amgen has not been alone amongst main drugmakers in asserting layoffs. Workforce reductions have additionally taken place throughout the previous few months at Basel, Switzerland-based pharma big Novartis and New Brunswick, New Jersey-based Johnson & Johnson, amongst a number of others.
Final month, Amgen accomplished one of many largest company bond choices in historical past, borrowing $24 billion to assist fund its $28 billion acquisition introduced in December of Dublin, Eire-based Horizon Therapeutics, which had targeted on creating medication to deal with autoimmune ailments. That acquisition continues to be in course of, pending regulatory approvals in the USA, Eire and different European international locations.
Though Amgen didn’t reference this immediately in its layoff announcement, the current sharp rise in rates of interest has meant elevated borrowing prices for bonds, financial institution traces of credit score and different types of company financing. Meaning it’ll value extra for Amgen to pay again the bond bundle, which has put much more stress on the corporate’s backside line.
Amgen shares fell 2% on March 17, the primary full buying and selling day after information of the second spherical of layoffs. And Amgen shares have fallen 11.5% for the reason that starting of the yr, even because the Nasdaq composite index has risen 12% in that interval. (Amgen trades on the Nasdaq alternate.)
In January, Amgen reported fourth-quarter earnings of $1.62 billion on income of $6.84 billion, down 15% and 0.6%, respectively, from fourth-quarter 2021. For all of 2022, Amgen reported web revenue of $6.55 billion on income of $26.3 billion, up 11% and 1.3%, respectively, from 2021.
Trying forward, regardless of the 2 rounds of layoffs introduced up to now this yr, it’s doable Amgen may end the yr with extra staff than it started. Apart from some other hiring the corporate may do in different areas, most of Horizon Therapeutics’ roughly 2,100 staff may very well be added to Amgen’s payroll ought to the deal clear all regulatory hurdles and be finalized earlier than the tip of the yr.