AstraZeneca PLC (AZN,AZN.L) announced that it will undertake additional restructuring within its R&D function. These plans include a reduction in the number of disease area targets within its core therapeutic areas, a continued focus on externalisation, some consolidation of our activities onto a smaller R&D site footprint, and other efficiency measures, subject to consultations with work councils, trades unions and other employee representatives and in accordance with local labour laws.
The company said, by 2014, annual savings of $1 billion should be realised, of which one-half is estimated to be cost savings and the other half cost avoidance.
Based on preliminary estimates, approximately 3,500 positions may be affected by this programme. The company expects, after taking account of positions that will be retained whilst being relocated to another site, the investment in new skills and capabilities and further expansion of our Biologics activities, the net reduction may be around 1,800 positions. The cost of this restructuring is estimated to be $1 billion, of which approximately 60% will be cash costs.
The company also stated that the next phase of restructuring, which includes completion of the previous programmes, some additional initiatives in supply chain and in SG&A, and the newly announced R&D programme, will result in the realisation of a further $1.9 billion in estimated annual benefits by the end of 2014; half to be realised by 2011, with most of the remainder realised by the end of 2013. These programmes, when fully implemented, are planned to impact an additional 10,400 positions. Additional restructuring charges of $2.0 billion are anticipated between 2010 and 2013, with approximately 60% to be taken in 2010, and most of the remainder by 2011.
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