Big pharma employee numbers stagnant as big biotech booms

Big restructuring programmes affecting thousands of employees might make the headlines and paint a picture of a shrinking pharmaceutical industry but, as always, the actual story is more complex. Data collected from annual reports reveal that big pharma employee numbers have actually not dropped off much over the past six years, contracting only 4% since 2007 and flat last year.

Expansion in emerging markets has undoubtedly played a major part in keeping up the headcount, and of course the top-line figures mask big layoffs to sales teams in the US and Europe in the wake of patent expiries. Meanwhile a look just outside the ranks of big pharma reveals how important big biotech is to the sector in terms of recruitment – Celgene for example has almost tripled its employees in the past six years (see tables).

Big pharma employee numbers - year end
2007 2010 2011 2012 chg (11-12) chg (07-12)
Johnson & Johnson 119,200 114,000 117,900 128,000 9% 7%
Novartis 98,200 119,418 123,686 127,724 3% 30%
Sanofi 99,495 101,575 113,719 111,974 (2%) 13%
GlaxoSmithKline 103,483 96,461 97,389 99,488 2% (4%)
Pfizer 86,600 110,600 103,700 91,500 (12%) 6%
Abbott Laboratories 68,000 90,000 91,000 91,000 0% 34%
Merck & Co 59,800 94,000 86,000 83,000 (3%) 39%
Roche 78,604 80,653 80,129 82,089 2% 4%
AstraZeneca 67,400 61,100 57,200 51,700 (10%) (23%)
Eli Lilly 40,600 38,350 38,080 38,350 1% (6%)
Bristol-Myers Squibb 42,000 27,000 27,000 28,000 4% (33%)
Schering-Plough 55,000 - - -
Wyeth 50,527 - - -
Total 968,909 933,157 935,803 932,825 0% (4%)

Thanks to its acquisition of Synthes in 2011, Johnson & Johnson became the biggest big pharma employer last year, leapfrogging Novartis, data from EvaluatePharma show. Because of its diverse business arms, however, the group is unlikely to employ the most people specifically involved in human therapeutics.

Novartis is one of the few big pharma firms to reveal employee numbers by region; GlaxoSmithKline and Lilly also disclose to this level. A closer look at these details shows that the last two companies have cut US employees by 31% and 20% respectively since 2007 – Novartis was also slimming down in the US until it bought out Alcon, which substantially swelled its US ranks. At the same time in regions such as Asia and Africa employee numbers have grown significantly – trends that will no doubt be repeated across the cohort and reflects these companies’ quest for growth outside their domestic markets.

The data also show that, despite the infamous patent cliff over which the industry has just toppled, employee numbers do not portray a similar precipice. A much bigger shift was seen over the 2007 to 2008 timeframe, with Bristol-Myers Squibb largely responsible for thousands of job losses after the pharma group sold units and made thousands redundant, although many other companies went through a period of employee retrenchment at that time.

Growth businesses

As a group, however, the world’s 11 biggest drugmakers have become a smaller employer over the past six years, by some 36,000 positions, retracting 4%, the analysis shows. The table below, meanwhile, shows the employee numbers, again as disclosed in annual reports, of other drug companies with a market value above $30bn. This reveals that the group has added 41,529 employees over the same period, expanding as big pharma has been shrinking.

Different market forces will have been shaping these companies but all paint a picture of growth. The only exception is Amgen, which, despite being the first big biotech on the scene, is arguably more closely related now to big pharma with its ageing blockbuster franchise and struggles to find new growth drivers.

Teva, most known for generics but with an expanding speciality arm, has grown largely through a string of acquisitions; the remaining names have been expanding organically. Hugely successful franchises in focused fields such as HIV for Gilead Sciences, blood cancers for Celgene and diabetes for Novo Nordisk have prompted the explosion in employee numbers. The stock market values of these companies have also been boosted accordingly.

It is not surprising that growth stocks, as the majority of the companies below could be described, are hiring. It is also no revelation to see the huge, multinational big pharma groups shifting in structure – for employers of tens of thousands of people, restructuring never really ends. It will be interesting to see if the big pharma sector does eventually shrink overall – reports recently suggest that many are hiring again in the US.

But with Pfizer, long one of the industry’s top employers, seemingly heading towards a break-up, any future drop in big pharma’s headcount could reflect structural shifts rather than a leaner and meaner sector.

Employee numbers for $30bn+ drug developers
2007 2010 2011 2012 chg (11-12) chg (07-12)
Baxter International 46,000 48,000 48,500 51,000 5% 11%
Teva Pharmaceutical Industries 27,912 39,660 45,754 45,948 0% 65%
Novo Nordisk 25,516 30,483 32,632 34,731 6% 36%
Amgen 17,500 17,400 17,800 18,000 1% 3%
Biogen Idec 4,300 4,850 5,000 5,950 19% 38%
Gilead Sciences 2,979 4,000 4,500 5,000 11% 68%
Celgene 1,685 4,182 4,460 4,700 5% 179%
Total 125,892 148,575 158,646 165,329 4% 31%

All data sourced from EvaluatePharma.

To contact the writer of this story email Amy Brown in London at [email protected] or follow @AmyEPVantage on Twitter

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