Eli Lilly announces global workforce reductions that are expected to impact approx. 3,500 positions; co expects annualized savings of approx. $500 million that will begin to be realized in 2018(80.51 )
Co expects the majority of the positions eliminated to come from a U.S. voluntary early retirement program, which is being offered to employees who meet certain criteria.
- Those who participate will receive enhanced retirement benefits.
- The program, announced to U.S. employees on September 7, 2017, will be largely completed by December 31, 2017.
- Remaining positions will come from other anticipated workforce reductions, including select site closures.
- In addition to the U.S. voluntary early retirement program, the company will determine where it needs to further reduce costs and improve efficiencies.
- Lilly expects to incur charges of ~$1.2 billion pre-tax or $0.80 per share after-tax, which includes the estimated participation of the U.S. voluntary early retirement program, global severance and facility closures.
- The company's reported earnings per share guidance in 2017 will be reduced by the amount of the charges.
- There will be no change to the company's non-GAAP EPS guidance as a result of these initiatives.
- The annualized workforce savings of ~$500 million will be about equally split to improve the company's cost structure and reinvest in the business, including product launches and clinical development for new indications and line extensions.