Amgen Cuts Staff, Lowers Guidance

Amgen(AMGN Quote - Cramer on AMGN - Stock Picks) will lay off 12% to 14% of its staff as part of a restructuring in response to lower revenue from anemia drug Aranesp, the drugmaker said after the market close Wednesday.

Amgen expects to complete the changes, which affect 2,200 to 2,600 workers, by 2008 and to record pretax restructuring charges of $600 million to $700 million in 2007 and 2008. It also lowered earnings guidance for the year to a range of $4.13 to $4.23 from its previous estimate of $4.28.

Amgen said the restructuring should reduce planned capital expenditures by $1.9 billion between 2007 and 2008, a relief that should result in improved cash flow. The company estimates it will yield pretax savings from prior plan between $1 billion and $1.3 billion in 2008.

Shares closed down 73 cents, or 1.4%, at $50.59, but rose 52 cents, or 1%, to $51.11 in recent after-hours trading Wednesday.