Struggling Merck to shed 7,000 jobs

Merck, the US pharmaceuticals company, will cut 7,000 jobs, or 11 per cent of its global workforce, as it struggles to cope with mounting litigation over its arthritis treatment Vioxx and falling revenues as patents expire on key drugs.

Merck said yesterday that about half of the redundancies would fall in the US. Merck will also close five of its 31 manufacturing plants around the world.

The company would not comment on whether jobs in the UK would be affected.

Merck said the restructuring, which will also include a streamlining of its manufacturing model, should save the company $4bn (£2bn) by the end of the decade.

The move, widely expected by Wall Street, comes as the New Jersey-based company is facing a number of problems. It is bracing itself for the loss of its patent on its blockbuster cholesterol drug Zocor - the world's number two drug by revenues - next June, with competition from generic drugs expected to wipe about $2bn from annual revenues.

Merck is also defending itself against 6,400 lawsuits over Vioxx, which was withdrawn from the market in September last year after the company revealed that a study showed it increased the likelihood of heart attack and stroke in patients. Merck has lost the first case over Vioxx in Texas and won the second one in New Jersey. Jury selection for the first federal trial over the drug begins today in Houston.

Richard Clark, the former head of Merck's manufacturing operations who replaced Raymond Gilmartin as chief executive in May, said the company was looking for ways to "enhance efficiencies".