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AstraZeneca cuts another 7,300 jobs

Plans to roll out more digital customer channels to reduce costs

Pharmaceutical company AstraZeneca is continuing with a major jobs cull by announcing another 7,300 redundancies, in a bid to cut costs, but has left uncertainty over the extent to which IT staff will be affected.

The cuts follow on from staff reductions made around the same time in 2010, when the company revealed 8,000 job cuts. It also announced 15,000 job losses in January 2009.

AstraZeneca said the job losses will hit its operations, R&D and selling, general and administrative divisions. It is unclear if technology jobs will be affected in this latest round of redundancies as a significant part of the company's IT is outsourced.

In the general and administrative division, which includes corporate and support functions, AstraZeneca hopes to cut costs by expanding its use of new customer channels to provide services.

This includes using digital technology and call centres for sales and medical advice, which it said has been successfully established in many developed markets.

In its operations division, AstraZeneca will focus on driving efficiency in the supply chain, with a particular focus on support functions.

Meanwhile, to reduce its costs of R&D, the company plans to reduce its core base of scientists working on neuroscience medicines to around 40 or 50, and these will work with partners in academia and industry around the world to develop products.

Examples of the IT outsourcing contracts AstraZeneca holds includes one signed in November 2011, for programming and reporting services from Cognizant. Cognizant also provides business process outsourcing, application maintenance and data management in several divisions of AstraZeneca.

A month later, AstraZeneca signed a five-year deal with Indian IT services provider HCL Technologies for outsourced data centre services and the implementation of a hybrid cloud.

This contract signing came after rumours surfaced in April 2011 suggesting that AstraZeneca wanted to break off its $1.4 billion (£860 million), seven-year outsourcing relationship with IBM, which began in July 2007.

AstraZeneca expects is restructuring plans to deliver around $1.6 billion (£1.01 billion) In annual savings by the end of 2014, at an estimated total cost of $2.1 billion (£1.3 billion).

David Brennan, CEO of AstraZeneca, said: "Since 2007, when we announced our first major restructuring programme, we have taken decisive steps to improve returns on investment, recognising that this demands concerted, enterprise-wide action. Today's initiatives should be seen in this strategic context as we continue to reshape our business to improve productivity and innovation and with it our long-term ability to compete in a rapidly changing healthcare environment.

"We are acutely aware that these decisions will affect many employees and we will strive to support our people as we implement these changes."


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