Eli Lilly to Cut More than 5,000 Jobs

As part of a broad restructuring plan that also aims to speed up development of key medicines, Eli Lilly will trim more than 5,000 jobs worldwide by the end of 2011.

The action will reduce the global workforce from 40,450 to 35,000 by the end of 2011, around 13% of the total headcount, and save an estimated one billion dollars in annual operating costs.

"We remain confident that continued focus on medical innovation is the best way to ensure the long-term growth of our company," said CEO John Lechleiter. "The changes we are announcing today will accelerate the progress of the most exciting pipeline in our history, with more than 60 molecules currently in clinical development," he said.

"These changes will also ensure that we meet the changing needs of our customers and operate our business in a manner consistent with an increasingly challenging environment," he added.

The company based in Indianapolis, Ind., said it would establish a "Development Center of Excellence" as part of an effort to accelerate late-stage development of new medicines, and reorganize its pharmaceutical operations into four business units. The development center "will distinguish Lilly from its peers by using one common operating system, one common set of priorities and a singular focus to streamline the development of new medicines," the company said.

Lechleiter said the global pharmaceutical industry is facing challenges stemming from slowing innovation, rising costs, patent expirations and increased generic competition.

"While our financial performance during the past few years has been strong, we will soon enter the most challenging period in our company's history," he said. "This is a pivotal moment for our company. The need for breakthrough medicines -- to help aging populations, to provide treatments and cures for deadly diseases, and to improve on inadequate options for many diseases -- has never been greater ... The test for our company is to bring those medicines to patients more efficiently and provide demonstrable value."