How AstraZeneca's U.S. Sales Reps Avoided the Current Round of Layoffs
AstraZeneca staff in the U.S. dodged a bullet this morning as the company announced 1,400 layoffs -- but none of them in America. The job losses will come instead in the U.K., Spain, Belgium and Sweden. AZ's explanation of the move was a masterpiece in cynical management-speak and news-burying. Its press statement starts off with this innocuous headline:
AstraZeneca to Realign Supply Chain to Improve Productivity and Move Closer to CustomersOK, so not too exciting. Who doesn't want to be closer to the customers (except the infectious ones)? It continues:
The introduction of new manufacturing processes has brought further opportunities to drive efficiencies across the global supply chain. The company will also establish a regional packing strategy, to improve its ability to respond to customer requirements, while equipping the business for emerging markets growth.Yawn! Wake me up when it's over ... but buried wa-a-ay down in the statement is this corker:
AstraZeneca will exit three sites, in Porriño in Spain, Destelbergen in Belgium and Umeå in Sweden; there will be roles affected at its facilities in Macclesfield in the UK and Södertälje in Sweden. These moves will result in a net reduction across the business of 1400 positions by 2013, subject to local consultation.David Smith, evp operations then has the good graces to apologize:
I realise these changes are difficult for our affected employees, with whom we will be consulting in the coming months. We believe these changes are necessary for the long-term strength of the business.PR tip: People respect you more of you just come out and say it in plain English, and don't try to spin it in PowerPoint-ese. (They don't teach you that at business school, but it's true, trust me.) Still, AZ folk in the US still think there jobs are on the line over the next few years:
The internal talk is that the layoffs are closer to 10,000 folks, mostly from the US offices.......
The Neuro/psych group is about to be decimated. 50% of the territories will no longer exist by Feb 2009. If you survive you will have double the number of MD's in your territory, which still won't be enough. Good luck to all.They have reason to worry. Back in 2007 the company said it planned to reduce its entire workforce by 11 percent, or 7,600 employees. So why did the U.S. sales force get spared in this round? Take a look at the change in AZ's numbers between this quarter and a year ago. Revenue went up from $7.1 to $7.7 billion while sales force expenses stayed flat. That meant AZ now gets $3.13 for every dollar it spends on reps and ads, up from $2.87 the year before.
The US sales reps might become even more productive if AZ gave them portable computer tablets for doctors' signatures that actually worked. The current batch freeze up frequently when the doc is about to sign, according to these folks.