Pharmaceutical giant Eli Lilly will close its New York-New Jersey headquarters in Bridgewater, as well as eliminate roughly 3,500 jobs around the world — about 8 percent of its total workforce — as part of an effort to streamline its operations.
The company said in a press release that the majority of the 3,500 employees will have the option of choosing its Voluntary Early Retirement Program, and that the move is expected to produce $500 million in savings annually starting next year.
“We have an abundance of opportunities — eight medicines launched in the past four years and the potential for two more by the end of next year,” David Ricks, Lilly's CEO, said in a press release. “To fully realize these opportunities and invest in the next generation of new medicines, we are taking action to streamline our organization and reduce our fixed costs around the world.
“The actions we are announcing today will result in a leaner, more nimble global organization and will accelerate progress towards our long-term goals of growing revenue, expanding operating margins and sustaining the flow of life-changing medicines from our pipeline.”
The Bridgewater office, which was located in the Grande Commons off of Route 22, had about 200 employees and was used mainly for research and development. Some of those employees will be relocated to the company’s New York City office and Branchburg location, which is staying open, or will be offered early retirement benefits if eligible, a company spokeswoman said.
The office is being closed as a way to “streamline the global pharmaceutical research and development activities,” the press release said. "The commitment and perseverance of our people, who never give up on our mission of tackling hard-to-treat diseases, make up our legacy of more than 140 years. We will implement changes with fairness and the utmost respect for our Lilly colleagues, while we remain a vibrant, thriving competitor."
The Indianapolis-based company expects to incur charges of approximately $1.2 billion in pre-tax ($0.80 per share after-tax), which includes the estimated participation of the U.S. voluntary early retirement program, global severance and facility closures. These charges will be reflected as asset impairment, restructuring and other special charges in the third and fourth quarters of 2017, the press release said.