Pfizer Axes Severance Packages
April 6th, 2012 // 1:01 pm @ jmpickett
Having already laid off some 26,000 employees in recent years, Pfizer plans to reduce severance packages for employees as of May 14 as part of yet another cost-cutting move, according to Bloomberg News, citing an internal memo. The move comes as the drugmaker considers selling or spinning off its animal health and nutrition businesses, which would likely involve eliminating still more jobs.
As reported previously, the drugmaker plans to cut $1 billion in expenses on top of the billions in cuts that have already been drained from R&D and marketing over the past few years in the wake of the 2009 acquisition of Wyeth and in response to generic competition, notably the top-selling Lipitor cholesterol pill (read here and here).
The memo says basic severance pay will be lowered to eight weeks from 12 for US employees and that health benefits will be offered for eight weeks instead of one year. The amount of severance pay and health benefits are determined based on tenure. Other parts of the severance package, including a 60-day notice and a $5,000 retraining program, will remain in place.
The cuts, by the way, also come after the Pfizer board gave ceo Ian Read a big pay hike last year, his first at the helm of the big drugmaker. In doing so, his compensation was tripled from the previous year, when he received $6.4 million, including a salary of $1.7 million, stock and option awards totaling about $12.5 million, a $3.5 million incentive and $319,000 in other compensation, such as use of company aircraft and a car and driver to contributions to Read’s retirement savings.
