Pfizer (up $0.08 to $27.05, Charts), the world's biggest drug company, announced the impending job cuts in the form of a press release but did not say when the reductions would take place.
The job cuts, which will affect some 2,200 workers, are coming from all levels of Pfizer's sales organization - from senior management to field representatives, Pfizer spokesman Paul Fitzhenry told Reuters.
Fitzhenry told the news agency this would end job cuts from the U.S. sales operation, but he added that all aspects of the company's operations remained under review.
Pfizer, which is reviewing every aspect of its operations in an effort to cut costs, is hoping to produce annual savings of $4 billion a year by 2008, Reuters reported.
Prudential Equity analyst Tim Anderson told Reuters the cuts were "helpful."
"The easier way to win is to have a pipeline (of new drugs in development), but until you have more sources of growth ahead of you, cutting costs is the smart thing to do," Anderson told the news service.
"I wouldn't be surprised if this was just the first step, but just how low to go is a very tough question to answer," Anderson added. "I actually don't think the industry knows how far they can cut."
The New York-based company also said it would present its "long-term outlook" in January, along with "additional actions for transforming the company."
Pfizer and Merck (up $0.05 to $43.67, Charts), the No. 4 U.S. drugmaker, have both been engaged in multibillion-dollar cost-cutting efforts to offset the patent loss on some blockbuster drugs.
Pfizer said that despite the reductions it will be "maintaining strong support" for its top-selling drug Lipitor, a cholesterol-cutter, Celebrex, an arthritis painkiller, and Geodon, an anti-psychotic. The company also said the reductions would not affect its newer products, like the inhalable insulin Exubera, the smoking cessation drug Chantix, the cancer drug Sutent, and Lyrica, the drug for nerve pain.
In addition, Pfizer will hold a meeting for analysts and the press at its research and development facilities in Groton, Conn., on Thursday, with the subject being the company's drug pipeline.
source - CNN, Reuters