Most of Allergan’s 1,500 job cuts will be in Southern California

Irvine-based Botox-maker Allergan will cut about 13% of its workforce - that’s 1,500 employees - as it restructures and aims to boost profits.

Most of the 1,500 job cuts that Botox maker Allergan Inc. announced Monday morning will be made in Southern California, the company’s chief executive said.

Allergan plans to eliminate 650 research and development jobs, the bulk of them at its sprawling Irvine campus, Allergan chief David E.I. Pyott said in an interview with The Times. The company will also close facilities in Santa Barbara (300 employees) and Carlsbad (100 employees), Pyott said.

“Sadly, I have to say, it will be quite a big effect on Southern California,” Pyott said. “Clearly there’s a big impact in Irvine.”

The cuts are intended to increase profits and make Allergan more appealing to investors as it attempts to fend off a $53 billion takeover attempt by Canadian rival Valeant Pharmaceuticals International Inc.

“Hopefully, at the end of the day, this will put more value on the table than the other side,” Pyott said.


Valeant has vowed to slash research spending at Allergan if it acquires the company, a move that it said would significantly improve its profitability. Pyott said that the 1,500 jobs he intends to eliminate pale compared with the 5,000 jobs he said Valeant would cut if it acquired the company.

The job cuts, announced Monday as part of a restructuring effort, account for about 13% of Allergan’s global workforce. In addition, the Irvine-based maker of Botox plans to eliminate about 250 vacant positions.

Valeant is backed by activist hedge fund manager Bill Ackman, whose Pershing Square Capital Management is Allergan’s top shareholder.

The protracted takeover attempt has sparked concerns among Allergan employees, Irvine merchants and the city’s mayor over potential job losses. Of Allergan’s 11,000-plus global work force, about 2,300 employees are based at its Irvine headquarters.

Pyott described the planned job cuts as “extremely unpleasant.” He said he intended to impose the cuts by Thanksgiving.

Valeant’s chief executive has suggested that Allergan is overstaffed and that its research and development team is ripe for cuts.

A company spokeswoman did not immediately return a request for comment on the situation.

The restructuring effort, Allergan said, will boost stockholder value through improved efficiency and productivity. The effort is expected to result in $475 million in pretax savings next year.

The company on Monday also announced its second-quarter earnings. Allergan said net income rose 16% to $417.2 million, or $1.37 per share, compared with a year earlier. Revenue rose 17% to $1.86 billion.

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