1500 Job Cuts

Good point. People don't get it, they don't consider the alternative to the 1500.

 

An alternative would be an acquisition, which Pyott is apparently looking at. These cuts have been in the plans from before Valeant reared their ugly heads.

Need to get costs down, so we can keep paying the executive bonuses. (now linked to EPS growth, which is also helped by firing good employees)

 

I honestly think everyone should go though this process once in their career lifetime just so that they understand how business work in this country. As much 1500 jobs will hurt certain people, it's always best to plan ahead, especially when your job becomes complacent.

 

My understanding is that a combined acquisition or buyback plus restructuring gives us a better chance at fending off Valeant than with no restructuring. It's unfortunate but all stockholders (this isn't just about execs) want is more money, more value, so anything AGN can do to show they'll get more with an independent
Company with less risk vs. Sharing with VRX shareholders is what they should be doing.

 

Allergan $UX

 

A total of 700 job cuts in R&D are planned worldwide. Does that mean only 50 will lose their job in R&D outside of the US? AGN has a significant number of R&D positions in Bridgewater (NJ), Marlow (UK), Beijing (China) and Tokyo (Japan). Are the folks at these sites worried unnecessarily? At the moment we don't know who will be going and who will be staying - extremely unsettling!!

 

If they need suggestions on who to cut, they can start with the useless Medical Affairs people and work their way over to those morons in Marketing.

 

Allergan marketing on my side is so incredibly lean already. When I worked at other companies there were literally 10 people per the 1 at Allergan.

There is no fat to be cut.

 

It's not an alternative, DP just cut the costs to make shareholders happier, the takeover may still happen and MP will cut job synergies... There is still a chance that both happens! These dudes are playing a huge chess game and we are pons!

 

Definitely have to agree with that. We are just pawns in someone else's game. The job cuts are helping allergan fend off valeant but they're aren't any guarantees that the takeover won't happen anyway.

 

Interesting use of the word "pons."

 

Follow Silicon Valley, People Out (of) Network Sucker... It's a play on words... People as of late over use the word literally all the time, they say it over and over 'without exaggeration' in Pharma, as well as 'that being said, piggyback, ROI, POA, SWAT, Etc'. Point is these CEOs all talk, golf, eat and drink together, we are PONS and it's sick!

 

The Human Side Of Allergan Layoffs: Victims Vent And Lament
July 28, 2014
By Linda R. Bernstein, Pharm.D., BioSpace.com Exclusive Story

Allergan's President Douglas S. Ingram said, "I am unabashedly unapologetic about this decision and here’s why...” during the company's layoff announcement at the Town Hall Meeting on July 21, 2014, according to a source.

There are two sides to every story, and when it comes to pharmaceutical company layoffs, this is no exception. While we may understand the financial motivations behind management decisions that lead to job loss...whether it be to improve earnings per share, make a company more appealing or less appealing to other companies for a potential buyout or takeover, or to simply tighten the operating belt, the human side of layoffs is a hard pill to swallow. Allergan is a case in point.

Our sources tell us that on January 6, 2014, Allergan, Inc. (AGN) privately announced that there would be a workforce reduction in three waves. The first job cuts were in March and the second cuts were around June/July. A third round of cuts announced in January were to be staged from September to December 2014. An announcement on July 21 pushes that third round up to November, with all cuts enforced November 28th if not sooner. An internal company business update indicated that Allergan anticipates the restructure will not be completed until January 2015. (Note: They have approximately 11,600 employees worldwide according to their company website.)

According to David Pyott, Chairman & CEO of Allergan, at the Q2 2014 Earnings Conference Call (July 21, 2014, 10:30 AM ET), “The essential elements of this plan are that we will reduce costs in 2015 relative to our earlier strategic plan by approximately $475 million and reduce our workforce by approximately 1,500 employees or 13 percent to drive a further major increase in EPS [earnings per share] relative to the last strategic plan that we presented to stockholders in May.” The plan also includes eliminating 250 vacant positions.

Feeling the impact

An Allergan employee laments, "Back in January, I had a very hard time believing that my position was safe. Eventually, we would all be subject to a later reduction."

There was a reduced workforce since January 2014 and this caused existing employees to work nights and weekends to cover for old positions. They were basically doing two jobs because they thought their jobs were safe.

"I have a mathematics degree but I didn't learn the equation 60-hour weeks plus quarterly revenue increase equals pink slip," said another employee.

Another source commented, "Even though Allergan announced 1,500 layoffs, there are actually more job cuts coming. There are more people who are going to be potentially impacted."

On the chopping block—key sites

Key Allergan sites to close include: Medford (Boston, MA), Santa Barbara (Central CA), and Carlsbad (Southern CA).

Medford is the production site where the SERI Surgical Scaffold is manufactured. It is a medical device used in open or laparoscopic procedures. All Medford employees will be let go.

Santa Barbara includes Research and Development, General and Administrative, Product Surveillance, Product Safety, Risk Management, Engineering, and Quality groups. A limited number of Quality positions transitioned to Irvine in June and July. The Santa Barbara location housed the call center for product complaints. Santa Barbara has 300 employees and all are being let go.

In the announcement made in January 2014, there was an opportunity for some employees to move to Austin, Texas where the Complaint Center is housed with existing infrastructure. All staff in customer support have been transferred.

Carlsbad is Allergan's SkinMedica business unit. Allergan acquired SkinMedica for about $350 million in December 2012. SkinMedica markets and sells prescription and nonprescription topical aesthetics skin care products for physicians to dispense to patients. Carlsbad employs 200 employees and all are being let go.

In addition to these sites, Allergan employees around the world are literally going to be walking into work each day for the next six weeks waiting to be fired. Cuts will also be made in Europe. They'll know in about six weeks, as will those at Allergan’s headquarters in Irvine.

Emotional Town Hall Meeting

Sources tell us that in a Town Hall Meeting for Santa Barbara employees, Allergan's site leader Bob Perry choked up when he made the layoff announcement. “He was sad yet open and vulnerable. He explained what was happening and why. He was very gentle in his approach. He embodied Allergan's value of integrity; a company that prides itself in comradery and personal growth.” According to the source, Allergan is almost like the "Google of Biotech."

One of Allergan's values is "People + Passion." It states "We succeed primarily through our people, whose talent brings quality to our work and whose passion brings commitment—not just from processes and structures alone."

The mood changed when Allergan's President, Douglas S. Ingram, came on the video broadcast during the Town Hall Meeting. According to the source, Mr. Ingram did not seem sorry for the Allergan employees being laid off, as he said repeatedly, "I am unabashedly unapologetic about this decision and here’s why...” as he pointed to the revenue blocks for 2Q14 in a presentation. The President said, "This was a catalyst to drive cost."

"Based on Ingram's 'unabashedly unapologetic' broken record, Allergan is just another company whose top-level leadership's character is overtly, 'unabashedly' misaligned with its published core values," an Allergan employee commented.

What started all of this drama? The whole Valeant (VRX) bid set this in motion. Had they been successful in their bid for Allergan, Valeant Chief Executive J. Michael Pearson predicted in April that about 20 percent of the new company's 28,000 employees would lose their jobs in a merger.

To show solidarity against Valeant’s hostile bid, blue Allergan wrist bands were worn by Allergan employees. "Team Allergan" was printed on the bracelets to show that Allergan employees stuck together. In addition to the Team Allergan Blue wrist bands, there were Allergan Blue 'Blue Food' bake-offs, Allergan Blue Mad Hatter contests, and Allergan Blue Fridays when everyone was encouraged to dress in blue.

Allergan is looking to be acquired but does not want to accept Valeant's bid. Allergan is looking for another partner who will continue to develop their pipeline.

High anxiety

An Allergan employee at the headquarters in Irvine said “We're all freaking out. Tons of anxiety.” The employee also said that their meeting was “super confusing.” Keep in mind that these are people with advanced degrees who found their Town Hall Meeting confusing AND many of them own homes in Orange County where homes’ sales prices are prohibitive for the average buyer. This will impact Allergan staff from Irvine to possibly sell their homes.

The human side of layoffs cannot be ignored and should not be overshadowed by improved financial statements being touted by management. Whether it be job uncertainty and frustration, having to take on a fired employee’s responsibilities or needing to sell your house because you can’t make the payments, the impact of layoffs can be heart wrenching and tragic. They affect individuals at all levels, from the high school graduate to those who have advanced degrees; devoted employees who were counting on a successful and long future with the company, and most importantly families who become disrupted or destitute.

 

And as much as some if you are blaming DP & DI, it was ALL brought on by Pearson and Ackman. Remember that AGN was doing just fine with its investors before all this crap started. There was NO plan to lay off 1500 and close 3 locations. Wake up and fight back. At least with 1500 layoffs you may have a chance to survive, if Valeant takes over you have a 3% chance of surviving!

 

If we were doing just fine, as you claim, (and were are not and were not) then we would not need to have these lay offs

In all actuality, it is an admission by Pyott and team that these layoffs that were suggested by Valeant were actually needed.

So stop blaming Valeant for Pyott's weaknesses. I blame ALL of this on Allergan's upper management, or should I say MISMANAGEMENT.

 

1500 layoffs are better than everyone getting canned and Valeant getting their grubby hands on agn cash!!!

 

You know that is not true. Everyone will not be let go. Face it Allergan has been in a downward spiral for several years. The only thing that has been positive is botox. Everything else and all other divisions are awful. The culture, the treatment of employees, all of it.

 

Not sure where you work but it's not like that here!!! If it's so terrible for you, you should be happy that you may be shown the door! Go find something better so you won't have to bring anyone else down.

 

Like Pyott gives a hoot about anybody but himself?!

These cuts are only a way of stalling to get more money out of Valeant and immediately vest the millions of options Pyott and the other execs are holding on after they "reluctantly" agree to sell out after they have done all of the cutting and the stock price goes up--increasing the spread of their options.

I worked for that thief before he became Chairman of Allergan, and he has always been nothing but a greedy monster making Bernie Madoff look like a penny-ante cardshark.

 

Wow. You might want to take your anti-over-dramatic pills. BTW - a little punctuation goes a long way.