Novartis Will Cut Up to 8,000 Jobs Under Shake-Up Plan

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Pharmaceutical giant

Novartis

said Tuesday it will lay off more than 7% of its workforce, just a few months after CEO Vas Narasimhan announced a plan to simplify the organizational chart.

Novartis

(ticker: NVS) will chop as many as 8,000 positions out of the total of 108,000 at the pharmaceutical company. The biggest impact of the layoffs will be at the company’s Switzerland headquarters, where as many as 1,400 people could lose their jobs.

The move is part of a larger strategy announced by the company in April. At the time, it said it was restructuring to merge its Pharmaceuticals and Oncology business units into one, and that it planned jobs cuts in the single-digit thousands.

The aim is to achieve at least $1 billion in annual savings by 2024, the company said in its quarterly earnings report in April.

Novartis
’s
American depositary receipts were down 1.3% to $84.15 following the news. The company has already started informing employees in Switzerland and will look to provide outplacement and career counseling support to those who are affected, a spokesperson said.

The stock trades at 13.03 times the per-share earnings expected over the next 12 months, compared with 35.67 times at Eli Lilly ’s (LLY) and 8.33 times at

Pfizer
,
according to FactSet.

Write to Karishma Vanjani at [email protected]