- As Valeant closes its $11 billion acquisition of Salix Pharmaceuticals, 258 Salix workers are scheduled for layoffs.
- Layoffs began on April 1 and will continue through October 30.
- Layoffs will affect various job functions; however, the Salix sales force will remain intact.
The layoffs do not come as a surprise to industry experts, or to those who have watched Valeant's behavior over the last several years. Buying companies with strong portfolios and pipelines, then cutting costs in order to maximize revenues, is standard operating procedure for Valeant, which is notorious when it comes to not investing in R&D.
In fact, compared with other companies, some of which invest as much as 20% or more of their total revenue in R&D. Valeant invests very little in R&D. In 2013 and also in 2014, Valeant only invested 3% of total revenues in R&D.
In contrast, last year, Salix invested 15% of its total revenues into R&D—which is one reason why it emerged as an attractive takeover target for Valeant.