Merck Moves Fall Flat

Updated from 2:57 p.m. EST

Merck (MRK Quote) said Monday it will cut 7,000 jobs, or 11% of its workforce, and close or sell five of 31 manufacturing plants over the next three years as part of a sweeping restructuring.

"The actions we are announcing today are an important first step in positioning Merck to meet the challenges the company faces now and in the future," said Richard T. Clark, who replaced Raymond V. Gilmartin as CEO in May. "Going forward, we also plan to pursue improved approaches to R&D, and marketing and sales." Details will be unveiled Dec. 15.

Merck, whose stock is down 38% since the start of 2003 on concerns about patent expirations and the uncertain impact of the Vioxx litigation, expects the program to create cost savings of $3.5 billion to $4 billion over the next five years. A significant portion of the savings will come from a new manufacturing supply strategy. ...