Pfizer Expected to Terminate a Large Number of Employees in Korea
August 31, 2015
By Alex Keown, BioSpace.com Breaking News Staff
NEW YORK – Pfizer Inc. is looking to terminate a number of its Korea-based employees as a means to increase efficiency in its management positions, Streetwise reported this morning.
The possible terminations come at a time when the small Korean branch has consistently shown strong growth despite a slowdown elsewhere, Streetwise said. Pfizer has informed the Korean union about the restructuring plan. A union representative said it will collaborate with management if layoffs are deemed necessary, but will oppose any job losses if reasons are not justifiable. Dismissals could begin by the end of the year, a Pfizer spokesperson told Streetwise. Neither Streetwise nor Pfizer speculated on the number of employees that could be terminated. Pfizer Korea currently has about 750 employees. Last year the Korean division reported $534.7 million in sales, up 4.8 percent over 2013.
In a 2014 interview with Korea JoongAng Daily, Lee Dong-soo, country manager of Pfizer Korea, said Pfizer Korea is a strong organization due to “having many talented employees with unique perseverance, initiative and a winning spirit that enables them to actively deal with a changing environment and moments of crisis.”
At the time Dong-soo said a number of Korean executives were sent to work in the company’s various global markets based on their strengths and business performances.
“It’s significant that the recent reshuffle has raised the status of Korea in the global market. We expect Korean talents to continue to play an active role, and Pfizer Korea will put our efforts into providing support to nurture global leaders,” Dong-soo said last year.
Possible layoffs in Korea come on the heels of the company exploring the possibility of breaking up into three separate entities. The company is expected to make a final decision by the end of 2016. Pfizer is currently operating as essentially two separate companies, Innovative Products and Established Products. To date the company has spent $300 million in total on the breakup, including $164 million spent this year, Frank A. D’Amelio, Pfizer’s chief financial officer, said earlier this month. The idea of Pfizer breaking up into smaller units has been floated for several years. Pfizer announced in 2012 it would shed units that were non-essential to its stated goal of focusing on the development of new medications.
In June Chris Schott, an analyst at J.P. Morgan told BioSpace that three years of audited financial statements (2014-2016) are required before any part of Pfizer could be spun off.
“…we also see 2017 as an attractive time for action as investors see Pfizer’s innovative pipeline clearly contributing to growth and the established business having transitioned to a more stable profile,” he said.
While Pfizer explores a potential breakup, Pfizer’s chief executive Ian Read said the company was still on the hunt for potential acquisitions, something most analysts have expected since the company’s failure to acquire London-based AstraZeneca PLC . Some suspect Pfizer may take a stab at another British pharmaceutical company, GlaxoSmithKline . Pfizer was speculated to be considering the deal in order to “unlock access to its balance sheet and improve its tax situation,” according to an analyst following the situation.
Pfizer is not the only large entity to consider breaking up into smaller units. Just months after Allergan Inc. and Actavis plc merged to form Allergan Plc, the company is considering breaking up into two businesses as part of a corporate realignment before the ink on the deal completely dries. The possible corporate realignment would likely keep branded products in one company and spin the generic drugs off into a separate entity.