Published on : Jul 22, 2014
Allergan, best known as the maker of Botox, has announced plans to slash 13% of its workforce, which means that 1,500 employees will be facing the axe. Allergan said that the massive layoffs are in an effort to make the company more productive and efficient.
The company, based in Irvine, California, said Monday that nearly 250 vacant positions will be eliminated as part of this large-scale restructuring initiative. This, the company said, will allow it to focus on opportunities that give it the “highest value”, besides streamlining its business model.
The company is currently in a takeover bid from another pharmaceuticals giant, Valeant Pharmaceuticals. The jobs cuts were announced by Allergan the same day it reported a 16% spike in its second-quarter earnings, which reached USD 417.2 million. The company’s revenue showed a 17% jump, reaching USD 1.86 billion. Both revenue and earnings were higher than what market analysts had projected, based on FactSet reports.
The drug manufacturer also increased its 2014 adjusted earnings forecast per share. According to the company, this massive restricting effort will translate to annual pre-tax savings to the tune of approximately USD 475 million. And, costs tied to it will range between USD 375 million to USD 425 million. In the past few months, Valeant Pharmaceuticals and Pershing Square Capital Management, an investment firm, have bid several times to purchase Allergan. The latest bid, reports said, amounted to USD 53 billion in stock and cash. However, the company has refused to accept any bids stating that these ‘substantially undervalue’ the worth of the company, and these would expose its stakeholders to big risks.