Bristol Myers Squibb to cut 2,200 jobs as part of $1.5bn cost-savings drive

25th Apr 2024 15:17

(Sharecast News) - US drugmaker Bristol Myers Squibb on Thursday announced plans to cut its workforce by 6% as part of a $1.5bn cost-savings programme, as it reported better-than-expected results for the first quarter.

The company said it was launching a "Strategic Productivity Initiative" to deliver the cost savings, of which the majority will be reinvested to fund innovation and drive growth.

The initiative includes plans to lay off 2,200 employees this year (from its global headcount of 34,000), reduce management layers, "rationalise" its pipeline, consolidate sites and cut third-party spend.

The news came as BMS delivered net revenues of $11.9bn for the first three months of 2024, up from $11.3bn in 2023 and ahead of the $11.5bn consensus forecast.

However, losses per share widened significantly to $5.89 from a profit of $1.07 a share a year earlier, mainly as a result of a $12.1bn one-off non-tax-deductible charge for the acquisition of Karuna, which completed in March.

As a result of recent deals - which also included the completion of the RayzeBio acquisition February - BMS is now guiding to adjusted EPS of $0.40-0.70 this year, considerably down from the February guidance of $7.10-7.40.

The new guidance includes a $6.73-a-share negative impact from so-called acquired in-process research and development (or IPR&D) as a result of recent closed transactions.

"We had a good start to 2024, with revenue growth, important advances in our pipeline and the closure of several strategically important transactions," said Christopher Boerner, chair and chief executive officer.

"Our focus remains on strengthening the company's long-term growth profile. As a part of our continued evolution, we're executing a strategic productivity initiative that will allow us to be more agile, drive efficiency across the company, and prioritize investing in opportunities where we see the greatest potential to get the most promising medicines to patients as quickly as possible."

The stock was down 8% at $45.05 just before midday in New York.