Last month, under activist investor pressure, animal health leader Zoetis announced some cost-cutting blueprints it said would save it $300 million by 2017. And now, 165 New Jersey workers are hitting the road as part of that plan.
The company has filed a WARN notice with the state’s department of labor, and the employees–based in Florham Park, where the drugmaker is headquartered–will be out the door between this August and the end of next year, company spokeswoman Elinore White told FiercePharma. The departing staffers will receive severance, according to the WARN letter–provided they sign release agreements.
Those 165 positions are just a fraction of the total number Zoetis said in May it expects to shed, citing a workforce reduction of about 25%–or 2,500 jobs. Manufacturing, in particular, has been hit hard, with the company announcing it intends to close 10 unnamed sites as part of the cost squeeze.
Zoetis can thank rebel investor Pershing Square Capital Management–run by Bill Ackman–for putting it through the ringer. Ackman first picked up a stake in the Pfizer spinoff last fall, when some speculated he could use it as a backup buy if he and partner Valeant lost out on their hostile takeover try for Allergan.
While that still hasn’t happened, Pershing Square has been ramping up the pressure on Zoetis, in February winning a seat on the company’s board of directors.
In the meantime, though, other buyout rumors have been floating around, and if any of them eventually come true, more layoffs could be on the way. Industry watchers say Zoetis could make an attractive target for Bayer, which has long been looking to beef up its animal health business–and which will have some extra cash once it goes through with plans to divest its plastics division.
By Carly Helfand
