Roche cuts 1000 jobs with US R&D site closure

Swiss pharma giant Roche has announced that it is cutting 1000 jobs in the US – two thirds of them in R&D –  with the closure of its site in Nutley, New Jersey by the end of 2013. The shuttering of its only East Coast R&D site is part of a streamlining drive which will see research activities from the Nutley site moved to Germany and Switzerland.

Nutley currently carries out research in inflammation, oncology and virology. Roche has said that it will close the inflammation unit there, while the oncology and virology units will be merged with ones in Basel and Schlieren in Switzerland and Penzberg in Germany. A breakdown of the savings made by shutting the site will not be released until 26 July, when the firm’s half-year results are announced.

Despite cutting costs by 50% in the past two years, Tom Lyon, Nutley site head, said that the decision to close Nutley was made because the former regional headquarters was too ‘expensive and oversized’ to keep going. The site will be cleaned up with a view to selling it in 2015.

Roche, which has over 20,000 employees in the US and another 60,000 worldwide, said the closure would help the business to keep its R&D costs stable. Chief executive Severin Schwan said the consolidation would enable the business to invest in ‘promising clinical programmes, while increasing our overall efficiency’.

There was one piece of good news for employees at the site though, with the announcement that Roche will be opening a new clinical research centre in early 2013. The new centre will be on the East Coast, although a decision has yet to be made on where it will be situated. Of the 240 positions created, the majority are expected to be filled by employees from the Nutley site.

Recent months have seen a spate of job cuts in the pharma sector. Amgen, AstraZeneca, Merck, Novartis, Sanofi and Takeda have all announced redundancies, with around 20,000 jobs going. The cuts have been blamed on a perfect storm of problems, including the expiry of key patents on many blockbuster drugs, drug pipelines running dry, competition from generic drug manufacturers, with the global financial crisis to top it all off.

The Nutley site has been central to Roche’s US operation for over 80 years and was instrumental in the discovery of Valium and benzodiazepines. It also played a part in the development of metastatic melanoma drug vemurafenib.