Big pharma employee numbers stagnant as big biotech booms

Date August 07, 2013

Big restructuring programmes affecting thousands of employees might make the headlines and paint a picture of a shrinking pharmaceutical industry but, as always, the actual story is more complex. Data collected from annual reports reveal that big pharma employee numbers have actually not dropped off much over the past six years, contracting only 4% since 2007 and flat last year.

Expansion in emerging markets has undoubtedly played a major part in keeping up the headcount, and of course the top-line figures mask big layoffs to sales teams in the US and Europe in the wake of patent expiries. Meanwhile a look just outside the ranks of big pharma reveals how important big biotech is to the sector in terms of recruitment – Celgene for example has almost tripled its employees in the past six years (see tables).

Big pharma employee numbers - year end 
  2007  2010  2011  2012  chg (11-12)  chg (07-12) 
Johnson & Johnson  119,200  114,000  117,900  128,000  9%  7% 
Novartis  98,200  119,418  123,686  127,724  3%  30% 
Sanofi  99,495  101,575  113,719  111,974  (2%)  13% 
GlaxoSmithKline  103,483  96,461  97,389  99,488  2%  (4%) 
Pfizer  86,600  110,600  103,700  91,500  (12%)  6% 
Abbott Laboratories  68,000  90,000  91,000  91,000  0%  34% 
Merck & Co  59,800  94,000  86,000  83,000  (3%)  39% 
Roche  78,604  80,653  80,129  82,089  2%  4% 
AstraZeneca  67,400  61,100  57,200  51,700  (10%)  (23%) 
Eli Lilly  40,600  38,350  38,080  38,350  1%  (6%) 
Bristol-Myers Squibb  42,000  27,000  27,000  28,000  4%  (33%) 
Schering-Plough  55,000     
Wyeth  50,527     
Total   968,909  933,157  935,803  932,825  0%  (4%) 

Thanks to its acquisition of Synthes in 2011, Johnson & Johnson became the biggest big pharma employer last year, leapfrogging Novartis, data from EvaluatePharma show. Because of its diverse business arms, however, the group is unlikely to employ the most people specifically involved in human therapeutics.

Novartis is one of the few big pharma firms to reveal employee numbers by region; GlaxoSmithKline and Lilly also disclose to this level. A closer look at these details shows that the last two companies have cut US employees by 31% and 20% respectively since 2007 – Novartis was also slimming down in the US until it bought out Alcon, which substantially swelled its US ranks. At the same time in regions such as Asia and Africa employee numbers have grown significantly – trends that will no doubt be repeated across the cohort and reflects these companies’ quest for growth outside their domestic markets.

The data also show that, despite the infamous patent cliff over which the industry has just toppled, employee numbers do not portray a similar precipice. A much bigger shift was seen over the 2007 to 2008 timeframe, with Bristol-Myers Squibb largely responsible for thousands of job losses after the pharma group sold units and made thousands redundant, although many other companies went through a period of employee retrenchment at that time.

Growth businesses

As a group, however, the world’s 11 biggest drugmakers have become a smaller employer over the past six years, by some 36,000 positions, retracting 4%, the analysis shows. The table below, meanwhile, shows the employee numbers, again as disclosed in annual reports, of other drug companies with a market value above $30bn. This reveals that the group has added 41,529 employees over the same period, expanding as big pharma has been shrinking.

Different market forces will have been shaping these companies but all paint a picture of growth. The only exception is Amgen, which, despite being the first big biotech on the scene, is arguably more closely related now to big pharma with its ageing blockbuster franchise and struggles to find new growth drivers.

Teva, most known for generics but with an expanding speciality arm, has grown largely through a string of acquisitions; the remaining names have been expanding organically. Hugely successful franchises in focused fields such as HIV for Gilead Sciences, blood cancers for Celgene and diabetes for Novo Nordisk have prompted the explosion in employee numbers. The stock market values of these companies have also been boosted accordingly.

It is not surprising that growth stocks, as the majority of the companies below could be described, are hiring. It is also no revelation to see the huge, multinational big pharma groups shifting in structure – for employers of tens of thousands of people, restructuring never really ends. It will be interesting to see if the big pharma sector does eventually shrink overall – reports recently suggest that many are hiring again in the US.

But with Pfizer, long one of the industry’s top employers, seemingly heading towards a break-up, any future drop in big pharma’s headcount could reflect structural shifts rather than a leaner and meaner sector.

Employee numbers for $30bn+ drug developers 
  2007  2010  2011  2012  chg (11-12)   chg (07-12)  
Baxter International  46,000  48,000  48,500  51,000  5%  11% 
Teva Pharmaceutical Industries  27,912  39,660  45,754  45,948  0%  65% 
Novo Nordisk  25,516  30,483  32,632  34,731  6%  36% 
Amgen  17,500  17,400  17,800  18,000  1%  3% 
Biogen Idec  4,300  4,850  5,000  5,950  19%  38% 
Gilead Sciences  2,979  4,000  4,500  5,000  11%  68% 
Celgene  1,685  4,182  4,460  4,700  5%  179% 
Total  125,892  148,575  158,646  165,329  4%  31% 

All data sourced from EvaluatePharma.

To contact the writer of this story email Amy Brown in London at AmyB@epvantage.com or follow  @AmyEPVantage on Twitter

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