AstraZeneca to lay off 120 Delaware workers
Dozens of AstraZeneca employees in Delaware received pink slips Thursday, just three weeks before Christmas.
The layoffs are part of cuts that will eliminate 700 positions across the United States by early 2017, the company announced.
Roughly 120 of those jobs will be eliminated at the pharmaceutical company's Fairfax headquarters. No job losses are expected at a company packaging facility in Newark.
"The remaining impacted roles are field-based roles across the U.S. and include both sales and non-sales roles," a company spokesperson said via email. "These changes are specific to the U.S. Commercial Business and do not apply to other parts of the business, including Newark, or other U.S.-based global employees."
As recently as Nov. 10, AstraZeneca told The News Journal the company had 2,100 workers in Delaware between its Fairfax headquarters and the Newark plant. On Thursday, the company said the cuts would bring AstrZeneca’s job totals down to 1,500. Company officials declined to elaborate on the discrepancy.
Delaware is expected to take the largest hit among AstraZeneca's U.S. operations when the layoffs take effect on Feb. 10.
"My heart goes out to the employees and families impacted by this announcement," Gov. Jack Markell said in a release. "We have a responsibility to give these workers access to resources to support their next steps, including our rapid response team from the state Department of Labor, which will go to work on their behalf."
AstraZeneca did not provide information about severance.
"AstraZeneca is committed to treating every employee with dignity and respect throughout this process," the spokesperson said. "Employees who are impacted will be provided with internal and external assistance and support."
In an announcement posted on the company's website, AstraZeneca said the layoffs are part of the company's return to growth strategy. The company's U.S. revenue has been on the decline in 2016, including a 22-percent drop in the second quarter.
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"These changes reflect the ongoing focus to further streamline and drive greater efficiency across the entire organization," the statement said. "We continue to face loss-of-exclusivity impacts from many of our legacy products and work to compete in an ever-changing external environment."
AstraZeneca received a large economic development incentive package from then-governor Tom Carper in 1999 that brought the company's U.S. headquarters to Delaware. The company received a $40.7 million package of grants and tax credits along with $70 million in road improvements to convince the newly formed AstraZeneca to establish its North American headquarters in Fairfax. In exchange, AstraZeneca pledged to increase its workforce at the site from 2,400 to 4,000 by 2004.
AstraZeneca's employment hit a peak of 5,000 workers in 2005, only to have patent losses and a global recession lead to a major restructuring that has gradually reduced the company's local workforce.
"AstraZeneca’s announcement of layoffs to its Delaware headquarters is deeply disappointing," Carper said in a release. "It is our duty now to ensure these Delawareans land on their feet and find great opportunity in the face of this adversity."
Carper noted that AstraZeneca has been "a good corporate citizen and major employer" in the state for many years.
"While this is a tough time for the company, I am hopeful it will gain solid footing and be able to grow and thrive with the new drugs in its pipeline," he said.
Recently, the drugmaker has been transforming itself both globally and in Delaware. The company has shifted its focus from highly competitive pharmaceutical markets, such as antibiotics, to medicines that target diseases with little or no treatment options. That strategy has fueled AstraZeneca's $4 billion purchase of a stake in Acerta Pharma, a Netherlands company developing a rare blood cancer medicine that would have only one competitor.
Executives in May first announced plans to cut sales and manufacturing operations as part of an effort to eliminate $1 billion from its budget by the end of 2017.
Last summer, the drugmaker put its nearly 30-acre campus in Fairfax on the sales block. Sources familiar with the offering said the company was looking to reduce costs by selling the property to a real estate investment company that would then redevelop the campus and lease it back to AstraZeneca. The company said it also was considering moving to a new location in Delaware, an announcement that set off a flurry of speculation about what those plans might mean for the company's future in the state.
As part of that initiative and to cut costs, AstraZeneca sold its molecular antibiotics business to Pfizer in August for $1.6 billion. Weeks later, the company said it would be closing its Fort Washington, Pennsylvania, plant and relocating its 134 workers to Fairfax.
The company did not reveal how many of those relocated workers were included in Thursday's layoff announcement.
"I’m very sorry to hear about these or any job reductions, especially so this close to the holidays," state Sen. Greg Lavelle, who represents the Fairfax area. "On a macro level, it's our challenge to make Delaware an attractive place to do business, but on a micro level the impact to these 120 families, particularly at this time of year, is just sorrowful."
U.S. Rep. John Carney, who will be sworn in as Delaware's next governor on Jan. 17, described the layoffs as "devastating" for the 120 workers and their families.
"I am committed to doing whatever I can to make the transition to the next phase in their careers as quick and easy as possible," he said. "My thoughts are with them, particularly during this holiday season."
The layoffs at AstraZeneca just weeks before Christmas echo the mass layoffs DuPont co. announced in 2015. The chemical giant broke the news that it intended to cut 1,700 jobs in Delaware –28 percent of its local – just days after the holiday. Those workers were all let go by the end of March.
Betty Bronstein, owner of the nearby shop Artisan Gifts, said AstraZeneca employees are a common sight and often come through her doors. But she isn’t worried about their loss becoming her own.
“We always have AstraZeneca shoppers because we’re in their backyard and they're in our backyard,” she said. “AstraZeneca has had their layoffs in the past few years and our shoppers always come back to us.”
Bob Aeronsen, whose family has owned the Fairfax Shopping Center across the street from AstraZeneca's headquarters since the 1960s, said he does not believe the layoffs announced Thursday will be devastating to the area economy.
"In the last couple of years, Nemours has built a monster hospital nearby and JPMorgan has dramatically increased its employment after taking over what were previously AstraZeneca buildings," he said. "So while these layoffs are not good for anybody, the impact here in Fairfax will not be as bad as it might have been a few years ago."
Aeronsen said he's convinced the layoffs announced this week are a foreshadowing of AstraZeneca's eventual withdraw from Delaware entirely.
"Personally, I hope they do it quickly and get it over with," he said. "That way someone will have the opportunity to come in and take over their campus sooner rather than later."
Contact Jeff Mordock at (302) 324-2786, on Twitter @JeffMordockTNJ or jmordock@delawareonline.com. Contact business reporter Scott Goss at (302) 324-2281, sgoss@delawareonline.com or on Twitter @ScottGossDel. Contact Adam Duvernay at (302) 324-2785 or aduvernay@delawareonline.com.