THOUSAND OAKS, Calif. – Amgen Inc., with its stock price dropping and profit slowing, announced today that it would cut 2,200 to 2,600 jobs – 12 to 14 percent of its work force – in the next two years, according to Bloomberg News.
The cuts, the first in the company’s 27-year history, are designed to save the company more than $1 billion in 2008, the company said in a statement.
The company’s share price has fallen 26 percent this year after studies showed evidence that the company’s two anemia drugs, Aranesp and Epogen, posed health risks. The drugs combine for nearly half of Amgen’s revenue.
The company lowered its profit forecast for the year to $4.13 to $4.23 a share from $4.30 to $4.50 a share. In addition, the company said that it would cut capital spending $1.9 billion during 2007 and 2008 to prop up its cash flow.
“Amgen is a painful story this year,” Sven Borho, a portfolio manager with Orbimed Advisors in New York, which owns 5 million Amgen shares, told Bloomberg News.
“It doesn’t look like they’re cutting muscle or brawn, but trimming the fat around the edges,” said Geoffrey Porges, an analyst with Sanford C. Bernstein in New York, in an interview with Bloomberg News. “It’s encouraging because it shows the company is committed to preserving earnings, cash flow and shareholder value.”
Amgen Inc. (Nasdaq: AMGN) – based in Thousand Oaks, Calif., with operations in 10 other U.S. locations, including West Greenwich – develops and produces new medicines for human use. Additional information is available at www.amgen.com.
