New Chief at Pfizer Will Reduce Sales Force [New York Times]
Summary: Behind a new CEO who came aboard in July, Pfizer is on a cost-cutting mission, having just announced a 20% reduction (-2,400) in its U.S. sales force (but only amounting to a 2% cut to its 106,000 global employees). According to a company statement, there will be further "“actions for transforming the company” in January. A Raymond James analyst commented that other firms will likely follow suit since they "... were reluctant to cut their sales forces while Pfizer was continuing to have people on the ground." He equated it to "the end of an arms race." This will be a welcome relief for care providers, some saying they are overwhelmed by salespeople. Forbes reports the number of salespeople tripled in the past decade, now with one for every 9 doctors, compared to 1:18 in 1996. Pfizer's shares are trading about 0.7% higher in the pre-market on thin volume, similar to where they traded in after-hours yesterday.
Related links: Pfizer press release. Media coverage: Forbes and Reuters. Commentary: Pharmaceutical Shares Slip on Concerns Over Democratic House • Pfizer Gets Setback on New Cholesterol Drug • Pharmaceuticals Show Higher Profits, But Pfizer Forecasts Flat Revenues Through 2008 • Time To Buy Pfizer?
Potentially impacted stocks and ETFs: Pfizer (PFE) • Competitors: Merck (MRK), Eli Lilly (LLY), Novartis AG (NVS), Wyeth (WYE) • ETFs: iShares Dow Jones US Pharmaceuticals (IHE), iShares Dow Jones US Healthcare (IYH), Pharmaceutical HOLDRs (PPH), Vanguard Health Care (VHT), Health Care Select SPDR (XLV), First Trust Morningstar Dividend Leaders (FDL)
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