Three Big Drug Makers Announce Cost-Cutting Programs

Drug makers Pfizer Inc., Upjohn Co. and American Cyanamid Co. on Tuesday announced plans to eliminate thousands of jobs in restructuring programs intended to cut costs by hundreds of millions of dollars.

New York-based Pfizer Inc. said that cutting out about 3,000 jobs will save it at least $130 million. Kalamazoo, Mich.-based Upjohn said it will eliminate 1,500 jobs, to save a minimum of $150 million in annual operating expenses.

Wayne, N.J.-based American Cyanamid said it anticipates cutting about 2,500 positions.

The restructurings will also get rid of excess capacity at some plants and include writing off some assets.

Pfizer said its plan meant it will take a third-quarter pretax charge of $750 million, for a net loss of $214.2 million, or 65 cents a share. That compares with a profit of $297.5 million, or 88 cents a share, a year ago.

Pfizer said the layoffs, coupled with previously announced streamlining, would ultimately reduce its overall work force by about 10%, or 4,000 people.

It said it will save at least $130 million annually through the restructuring, which is to be phased in over several years.

Shares of Pfizer slipped 75 cents to $63 on the New York Stock Exchange.

The restructuring at Upjohn, which resulted in a $183-million charge against third-quarter earnings, is the second major job-reduction effort that company has launched in the last 12 months.

Upjohn on Tuesday reported a third-quarter loss of $30 million, or 19 cents a share, after the restructuring charge, versus a profit of $131 million, or 73 cents a share, last year. That amount included $15 million in one-time charges.

Sales rose to $900 million in the third quarter of 1993 from $894 million in the comparable period last year. Upjohn’s stock Tuesday rose 37.5 cents to $32 a share on the New York Stock Exchange.

Upjohn said it expects the job cuts to be completed by the end of 1994. It said that by then, it expects its worldwide employment to total about 17,500, down from about 21,100 employees at the beginning of 1989.

American Cyanamid said it anticipated a charge of up to $200 million to be reflected in fourth-quarter operating results. The company said job reductions will primarily hit the medical business, affecting about 9% of those 27,000 employees.

Spokeswoman Charlotte Cuff said that work force total excluded Cyanamid’s chemical business, Cytec Industries, which the company plans to spin off to shareholders.

Shares of American Cyanamid rose 37.5 cents to $57.50 on the NYSE.