AstraZeneca (NYSE:AZN) has come up with a plan to increase research and development productivity and reduce costs. The company will concentrate its research and development into three sites: Cambridge, U.K.; Gaithersburg, Md., U.S.; and Mölndal, Sweden.
Cambridge is a new site that will become AstraZeneca's new global headquarters. It'll consolidate the company's U.K. research and development as well as its corporate and global commercial roles. Gaithersburg was inherited when the pharma bought MedImmune and will continue to carry our research on biologics. Mölndal will focus on small-molecule drugs.
Nearly 2,500 jobs will be relocated to the three sites. Another 1,600 jobs will be eliminated as it closes down research centers. About 650 of the lost jobs will be in the U.S., the company said. Wilmington, Del., will remain the North America commercial headquarters of the company, but about 1,200 roles will leave Wilmington (some jobs eliminated; some relocated), leaving 2,000 employees there. Overall job cuts of 1,600 amount to nearly 3% of AstraZeneca's work force, according to the AP.
The reorganization will result in one-time restructuring charges of $1.4 billion, an estimated $800 million of which will be cash costs. The company also plans to invest $500 million into the new Cambridge site.
AstraZeneca expects to save $190 million a year starting in 2016 when the changes are expected to be completed. And the company hopes there will be unquantifiable benefits from bringing teams together to "improve collaboration and to create a more vibrant environment."