AstraZeneca to axe 7,300 jobs

The Anglo-Swedish drugs giant AstraZeneca said Thursday that it would axe 7,300 jobs by the end of 2014 in a new cost-cutting drive, despite delivering bumper annual profits. The London-listed pharmaceuticals firm added that it would also buy back $4.5 billion of its own shares this year. "Today the company announces the start of a new set of restructuring initiatives to further reduce costs and increase flexibility in all functional areas," AstraZeneca said in a results statement. "The total number of positions expected to be impacted for this phase is estimated to be approximately 7,300." The job cuts are forecast to deliver $1.6 billion in annual benefits by the end of 2014, and are part of an ongoing efficiency drive. It axed 12,600 positions between 2007-2009 and removed 9,000 more by the end of last year. Meanwhile, net profit surged 23 percent to $9.98 billion (7.59 billion euros) last year, compared with $8.053 billion in 2010. However, operating profits slid four percent to $13.2 billion. Fourth-quarter revenues flattened to $8.656 billion, while annual revenues edged two percent lower to $33.591 billion. And AstraZeneca warned that earnings were expected to fall this year as patents on key drugs expire, sparking increased competition from generic drugmakers, and amid government intervention in Europe and the United States. "Disciplined execution of our strategy has delivered a good performance in 2011 in the face of intensified pricing pressure and generic competition," said chief executive David Brennan. "Our strong cash flow supported a significant increase in cash distributions to shareholders and continued investment to drive future growth and value. "While the further expected losses of market exclusivity make for a challenging 2012 outlook, we remain committed to a long-term, focused, research-and-development based strategy." In reaction, AstraZeneca shares sank 3.40 percent to 2,984.5 pence on London's FTSE 100 index of leading companies, which was 0.25 percent lower at 5,776.34 points. "Revenue guidance for 2012 is for double-digit (revenue) declines ... driven by generic exposures and government interventions on pricing," noted analyst Mike Mitchell at brokers Seymour Pierce. AstraZeneca employs 61,000 people worldwide, of which 8,000 staff are in Britain. It did not state where the latest round of job losses would fall.