You say “layoffs,” I say “strategic expense reduction”

Posted by Matt Purdue

At least there are some winners during this, the Great Recession. This week they happen to be Wyeth shareholders. Pharmaceutical giant Pfizer has announced plans to buy Wyeth for $68 billion in cash and stock. Pfizer will be paying $50.19 per share, a premium of nearly 15 percent over Wyeth’s closing price last Friday. 

At the same time, Pfizer said it plans to trim 8,000 jobs, or about 10 percent of its workforce. As Pfizer takes over, however, 15 percent of the combined companies’ staff is expected to be laid off, totaling some 20,000 jobs. 

Surprisingly, there’s been little outrage over the fact that somehow Pzifer was able to come up $22.5 billion in cash as part of this deal, yet continues to slash jobs. One blogger does connect the dots, wondering why banks that received federal bailout money are now financing this deal that will result in thousands of job losses. But other than a few voices in the wilderness, the mainstream press essentially ignores the human cost of consolidation in the pharma sector. 

Obviously, no bank is going to give any company financing to give employees raises or bonuses. But, in this case, Pfizer seems to have gotten a free pass from the media to make a deal despite the consequences. AP mentioned the job cuts in the third paragraph, but also called the acquisition a “bold move.” Forbes mentioned layoffs only in passing. The IHT doesn’t mention layoffs anywhere on the first page of its coverage.