Facilty Design & Management

Merck to cut jobs, close plants with $1.2B restructuring plan

May 01, 2019

Merck and Co. has created a restructuring plan it says is designed to optimize its manufacturing operations.  

The company laid out parts of the plan in a SEC filing, and reported that over the next four years, it will seek to make its operations and supply network more efficient by reducing its global manufacturing footprint. 

Merck did not disclose which plants specifically could be shuttered or how many jobs might get axed. But ultimately, Merck said the plan could cost from $800 million to $1.2 billion — 55 percent of these pretax costs will be spent on plant closings and “employee separation” expenses, while the remaining 45 percent of pretax costs will involve the accelerated depreciation of and/or divestitures of facilities. 

The news comes within days of Merck posting positive Q1 results driven by soaring sales of its vaccines and blockbuster cancer drug, Keytruda. According to the Associated Press, sales for Keytruda skyrocketed 55 percent to $2.27 billion and now comprises about one-quarter of the company’s revenue. 

In the regulatory filing, Merck said that it would continue to evaluate its operating model, “which could result in identification of additional actions over time.” 

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