Sumitomo Pharma's new CEO weighs layoffs in Japan after sharp sales drop, US job cuts: report
27 Jun 2024
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Source: FiercePharma
Sumitomo Pharma's U.S. cuts apparently weren't enough to recoup from a swift revenue decline, as Sumitomo is reportedly weighing more cuts this fiscal year.
A recent layoff round affecting 400 U.S. staffers was just the latest in Sumitomo Pharma’s waves of workforce reductions. Now, the Japanese pharma is reportedly weighing layoffs in its home country as revenues slide.
The company’s new CEO and president Toru Kimura, who just took the helm June 25, is weighing a restructuring plan that could be implemented “as soon as this fiscal year,” he told Nikkei Asia.
While the Japan job cuts “won’t be to the same extent as in the U.S.,” the company's recent revenue declines prompt “no choice but to take further measures, including offering early retirement,” Kimura added.
Still, no final decision has been made, a spokesperson told Fierce Pharma.
"We understand the necessity of streamlining our organization not to reduce productivity levels while adapting to changes in business scale and product mix in Japan, and we are considering all possible options, including early retirement," the spokesperson said.
So far, the company has slimmed down its U.S. workforce by some 1,260 people since early last year. Last month's round of 400 job cuts came after prior waves of 500 and 360 layoffs, respectively.
Despite recent sales growth for prostate cancer med Orgovyx, overactive bladder treatment Gemtesa and Pfizer-partnered uterine fibroid therapy Myfembree, Sumitomo’s annual revenue plummeted 43% to 314.5 billion yen ($1.9 billion) during its last fiscal year, which ended March 31.
As for Kimura, the CEO was bumped up from his former position of senior managing executive officer. His CEO appointment was one of “various measures” Sumitomo implemented in an attempt to make an “early recovery” in its performance, the company disclosed in March.
The new CEO has already divulged an ambitious plan to return to profitability during the company’s 2025 fiscal year. Other than layoffs, Sumitomo plans to “sell what assets we can,” which could include overseas drug sales operations and manufacturing and marketing rights to Latuda and other off-patent meds, Kimura told Nikkei.
The pharma’s parent company, Sumitomo Chemical, is also reportedly considering finding partners that could offer financial support or collaborations.
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