Dive Brief:
- When Kenneth Frazier, CEO of Merck, announced an extra day off for all workers, not everyone was happy as he had expected.
- In a tense exchange, Dan Bangert, president of the local United Steelworkers Union chapter, told Frazier that union workers are demoralized and overworked. He also pointed out that union workers governed by a Collective Bargaining Agreement won't get to share in on the day off with other Merck employees.
- One point of contention is the huge loss of jobs—36,000 since 2009 when Merck and Schering Plough merged.
Dive Insight:
From his side of things, Bangert, who has been at Merck for 29 years, contends that all of the layoffs that have happened in the last six years are not only demoralizing, but also a cause of safety concerns. Frazier's perspective on this is that collective bargaining agreements sometimes make it hard to offer all employees the same perks.
But Bangert's concerns go beyond perks. He noted that many workers are working 16-hour shifts at the plant where he works in Westport, PA. He also noted tthat there were 500 layoffs during the holidays in 2013.
From a business perspective, Merck has needed to restructure several times in order to restore growth after a period of multiple hard-hitting patent expirations, including Singulair and Nasonex. Other job cuts came about after Frazier decided to sell Merck's consumer health unit to focus more on pharmaceuticals, including immunology-related drugs, vaccines, diabetes, and emerging markets.
There is good news, however. Merck's Q2 financials exceeded analysts' expectations—and the layoffs are almost over. Management anticipates laying off another 2600 workers involved in manufacturing at the end of next year—and then that's it for a while.