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DBL%20Hendrix%20small.png College chemistry, 1983

Derek Lowe The 2002 Model

Dbl%20new%20portrait%20B%26W.png After 10 years of blogging. . .

Derek Lowe, an Arkansan by birth, got his BA from Hendrix College and his PhD in organic chemistry from Duke before spending time in Germany on a Humboldt Fellowship on his post-doc. He's worked for several major pharmaceutical companies since 1989 on drug discovery projects against schizophrenia, Alzheimer's, diabetes, osteoporosis and other diseases. To contact Derek email him directly: derekb.lowe@gmail.com Twitter: Dereklowe

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February 4, 2010

BMS Freezes Salaries

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Posted by Derek

The hits just keep on coming. Bristol-Myers Squibb told its employees yesterday that there will be no pay increases this year, and from what I'm hearing, this took a lot of people completely by surprise. As late as last week, there was apparently still discussion of what the salary increases would be for various performance ratings and that sort of thing, but no more.

This sort of thing may or may not be a sign of imminent bad news, but it's never a sign of good news. We'll see what happens as the company continues to deal with the oncoming Plavix patent expiration and other issues. . .

Comments (20) + TrackBacks (0) | Category: Business and Markets


COMMENTS

1. Hap on February 4, 2010 10:53 AM writes...

As Pharmalot noted, though, they didn't freeze bonuses. Gee, I guess with such stellar performance, you wouldn't want to deprive upper management of the rightful rewards of their labor.

When you devalue competence and knowledge and value their converses, how do you expect the industry (or your company) to survive? I guess someone from pharma management will take the time to tell us that we need to work harder to overcome their looting and find a sustainable model that will enable them to loot at will and yet still allow their employees to keep their jobs. Good luck with that.

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2. FormerGSK on February 4, 2010 10:56 AM writes...

I'd rather have a salary freeze than a layoff, and I think most people would as well.

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3. Hap on February 4, 2010 11:04 AM writes...

I would, too. It just seems the pain is sort of spread inequitably, particularly considering the relative abilities of people getting salary increases and bonuses to effect change in the company's fortunes.

Salary freezes don't preclude layoffs, though they both give fair warning and also may lessen the number of layoffs required later on.

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4. MedChem on February 4, 2010 11:12 AM writes...

Abbott did the same thing a long time ago.

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5. BMSer on February 4, 2010 11:39 AM writes...

Personally I think it's great!
(now please let me keep my job... whimper)

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6. goldilocks on February 4, 2010 11:40 AM writes...

Why is this news? Other companies have done the same thing (AZ, GSK, among others) but it wasn't all over the internet.

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7. Wavefunction on February 4, 2010 11:47 AM writes...

In this Age of Layoffs, a salary freeze would be welcome

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8. Thomas McEntee on February 4, 2010 12:23 PM writes...

My company announced in September 2009 that for calendar 2010 we would be receiving a cash payout rather than a salary increase. Being a not-for-profit engineering R&D company that works almost exclusively for the world's most dependable customer, salary increases in normal times are minuscule compared to the for-profit sector. The company's primary motivation was to demonstrate to our customers our intention to control costs. My 2 percent of base payout was "OK"...I have a job, I'm not costing my customers anymore this year than last, and it sure beats the alternative.

Bloomberg had a report today on solar energy industry jobs in the US...hype about jobs creation here ignores the fact many of these are to assemble components produced in China by many more workers than are employed in the US. The article states that the minimum wage in Wuxi, China (anyone heard of THAT name before?) is 89 percent less than the US minimum wage.

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9. Chemjobber on February 4, 2010 12:30 PM writes...

Did anyone see the announcement that Pfizer is cutting research more in the WSJ yesterday? Don't know if it's old news or just more bad news...

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10. The Pharmacoepidemiologist on February 4, 2010 2:10 PM writes...

Two comments:

1. Did anyone notice that AZ is increasing its layoffs--new announcement today.

2. The other aspect of the BMS action is an unwillingness to defer vacation time. So now it becomes a use-it-or-lose-it approach to vacation time. And what does one do if one's supervisor won't let you take your vacation time because you are so "mission critical"? Last I heard, the vacation time's lost.

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11. Spectrochimico on February 4, 2010 2:12 PM writes...

Pfizer still has research left to cut? That's news to me.

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12. MedInformaticsMD on February 4, 2010 2:46 PM writes...

#1 Hap

When you devalue competence and knowledge and value their converses, how do you expect the industry (or your company) to survive?

Through management mysticism, of course.

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13. David P on February 4, 2010 4:01 PM writes...

As those above have commented, a salary freeze is better than lay-offs.

I think the reality is that salaries cannot increase in our industry right now, not for the researchers at least, because this increases the gap between US based workers and cheaper alternatives abroad. If we want to continue doing med-chem here, we have to work out a way to do it cheaper. An obvious way is to not pay people quite as much - those laid off should expect their next job to come with a cut in salary.

That is assuming they don't go in banking and start collecting those big bonuses.

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14. anchor on February 4, 2010 4:10 PM writes...

The news during the past few days have been very depressing. It seems to me that the pharmaceutical industry is on a auto pilot mode to destruction. Never, had I seen people in command plotting a strategy "how to fail". Who could have imagined the great American pharmaceutical industries are counting the days of their demise!

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15. Anonymous on February 4, 2010 4:30 PM writes...

It seems like this would kill people's motivation. If hard work, going above and beyond, trying to succeed, etc. gets you the same place as someone who just squeaks by, then why bust your hump?

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16. Silas on February 4, 2010 7:29 PM writes...

@8. "The article states that the minimum wage in Wuxi, China (anyone heard of THAT name before?) is 89 percent less than the US minimum wage."

Does the article refer to the minimum wage for janitors or gate keepers at Wuxi? I think the 89% difference is between the minimum legal wage in China and the common low in the US. According to what I have heard, the fresh Ph.Ds in companies like Wuxi probably make about $25K a year. The managers (directors and VPs) likely rake in at least 70% of their US pay (most of them had prior pharma experience in the US). Of cource, they work longer hours regularly.

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17. Anonymous on February 4, 2010 8:42 PM writes...

#8 an #16 as well as being a well known outsourcing provider, WuXi is also the name of a city in China, I suspect the remark about low wages refers to those in the factories there.

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18. Thomas McEntee on February 5, 2010 7:47 AM writes...

#16 -- Minimum wage was the basis of the comparison in the Bloomberg web report. I can't speak for Chinese practices but in the US, minimum wage is just that...minimum wage.
#17 -- Yes, the Bloomberg article was describing minimum wages paid in Wuxi, the city, not salaries paid to scientists at WuXi Apptec facilities in China.

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19. lkt on February 5, 2010 8:15 AM writes...

ditto #15

Also I think many businesses are taking advantage of the bad economy to cheap out on their employees, even though they might not really have to. For example last year we were told we would only get half of the raise we'd earned due to the economy, and no one could complain because it's better than a salary freeze or getting laid off. But yes I feel less motivated because of this, especially since execs still get their bonuses despite everything. C=A around here. I can do C work and get treated like those who do A work. no incentives, except to do enough to keep my job.

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20. AR on February 5, 2010 1:16 PM writes...

Freeze salaries, maybe, but I bet the corporate Johnnies will still demand employee performance reviews.

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