US pharmaceutical giant Merck & Co. has announced plans to make major cuts during the next two years, including cutting 20 percent of its staff.
Merck said Tuesday it wants to reduce annual spending by $2.5 billion by 2015, The Wall Street Journal reported. In addition to drastically reducing its workforce, now about 81,000, it plans to close some of its New Jersey offices.
Chief Executive Officer Kenneth Frazier told the Journal on Tuesday that Merck still plans to be a leader in research and development, with a focus on diseases like cancer, Alzheimer's and infection with the hepatitis C virus.
"You've got to make sure you establish an infrastructure that will allow you to have R&D in good times and bad," Frazier said.
Merck's worldwide workforce peaked at almost 100,000 after it acquired Schering-Plough in 2009. The layoffs will leave it only slightly bigger than it was before the merger.
Eve Slater, a former Merck R&D executive, told the Journal the big pharmaceutical companies have learned to leave riskier ventures to the smaller biotech companies.
"Merck and lot of the big companies wrongly tried to target blockbusters for major, mega-conditions, and that strategy failed," she said.