Pfizer Closes Bridgewater Site; Clock Ticks on CT Tax Deal; Layoffs All Over

Last Updated Oct 15, 2009 12:51 PM EDT

As Pfizer decides how to cut 19,500 jobs in its merger with Wyeth, which closed today, the clock is ticking at its New London campus on a tax deal that gives the company an 80 percent reduction in its municipal bill. The Day:
As an incentive to build its research headquarters in New London, Pfizer received a 10-year tax abatement that expires after 2011. Pfizer is only paying property taxes based on 20 percent of the assessed value of its New London property, but still is the top taxpayer, generating $1.3 [million] for the city this year. Pfizer has to maintain at least 1,000 jobs at the facility to keep the tax break. About 1,400 employees now work there.
In 2012 Pfizer begins paying the full load, about $6.1 million based on the current tax rate.
The ax already fell at Bridgewater, N.J., where a site is to close. Luckier were Wyeth's corporate headquarters in Madison, N.J. and pharmaceutical headquarters in Collegeville, Pa.

Bloomberg reported the scale of what's going on:
Pfizer Inc. may slash as much as $3 billion in research after combining its laboratories with Wyeth, putting thousands of scientists out of work and narrowing the drugmaker's search for new products.
The combined Pfizer will have an R&D budget that's 30 percent less than the old total of both companies. About 15 percent of the total workforce will lose their jobs. For laid-off scientists, the job market is grim:
"Pretty much all the high school chemistry jobs have been filled," said Steiner in a telephone interview. "Some of these are people who have been at a company for more than 25 years and are now entering the job market for the first time."
Sales reps are fretting about an imminent "communication day."

And finally: Don't believe what you read on Cafe Pharma, but there's a well-developed thread discussing the rumor that Pfizer's board wants CEO Jeff Kindler gone in 2010.

That seems counterintutive given that Kindler has just executed a transformative merger. However, note that when Kindler took over in July 2006, PFE stock was at $22.42. It's now trading at a 22 percent discount to that, at $17.37. And he cut the dividend. Former CEO Hank McKinnell was ousted after a similar decline in stock. (Of course, McKinnell didn't have to contend with the collapse of the world's credit markets on his watch.)

Image by Flickr user wadem, CC.

Comments

CBSN Live

pop-out
Live Video

Market Data

Watch CBSN Live

Watch CBS News anytime, anywhere with the new 24/7 digital news network. Stream CBSN live or on demand for FREE on your TV, computer, tablet, or smartphone.

Market News

Stock Watchlist