Eli Lilly and Company will be streamlining its operations to focus more resources on developing new medicines and to improve its cost structure. Global workforce reductions, including those from a U.S. voluntary early retirement program, are expected to impact about 3,500 positions.
The company expects annualized savings of about $500 million that will begin to be realized in 2018. These initiatives are part of a broad productivity plan underway at the company to improve its cost structure, particularly fixed costs, Lilly says.
"We have an abundance of opportunities — eight medicines launched in the past four years and the potential for two more by the end of next year," said David A. Ricks, Lilly's chairman and CEO. "To fully realize these opportunities and invest in the next generation of new medicines, we are taking action to streamline our organization and reduce our fixed costs around the world."
Lilly expects the majority of the positions eliminated to come from a U.S. voluntary early retirement program announced to employees on Sept. 7, 2017, and expected to be largely completed by Dec. 31, 2017.
Remaining positions will come from other anticipated workforce reductions, including select site closures, Lilly says. The company will move production from its animal health manufacturing facility in Larchwood, Iowa, to an existing plant in Fort Dodge, Iowa, and continue productivity improvement efforts around the world. In addition, a R&D office in Bridgewater, New Jersey, and the Lilly China Research and Development Center in Shanghai, China, will also close.