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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: Twitter: Dereklowe

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February 3, 2012

AstraZeneca in Waltham

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Posted by Derek

From several reports, here's what I have on AstraZeneca's plans in Waltham: they've told people there that cuts are coming. But they haven't gotten very specific on when, or who, or how many. All those questions (that is, all the questions there could be) are under review.

Pfizer has done this to their people before, as have other companies in the throes of layoffs, and it's the only way I know to actually push morale and productivity down even further in such a situation. You come to work for weeks, for months, not knowing if your, your lab, or your whole department is heading for the chopping block. All you're sure of is that someone is. And will your own stellar performance persuade upper management to keep you, when the time comes? Not likely, under these conditions - it'll more likely be the sort of thing where they draw lines through whole areas. Your fate, most people feel at these times, is not in your own hands. A less motivating environment couldn't be engineered on purpose.

But that's what AZ's management has chosen to do at their largest research site in North America. I hope that they enjoy the results. But then (and more on this later), these are the people who have chosen to spend billions buying back their own stock rather than put it into research in the first place. It's not like the score isn't already up there on the big screen for everyone to see.

Update: as mentioned in the comments, this does at least give everyone a warning bells, and a chance to explore other options, as they say. And that's true. AZ employees, though, have been seeing nasty cuts for a while now, and have been well aware that they're not in a stable environment. It's hard to make the decision to leave, but there have been plenty of chances to think about it in the last two or three years.

But I was actually arguing against the company's Waltham strategy from the viewpoint of upper management, on their terms. It's better for employees to have some warning, but I think it's better, for a company, to cut if you're going to cut, and get it over with. If you say that deep cuts are coming, you should do the actual deed as soon as you can. Then you tell the departments that are left, "OK, the storm has passed. Let's try to turn this thing around". But this current situation is the worst of both worlds. "All right, people, here come the big cuts: this site's closed, that site's closed. But your site, well, we don't really want to close it, but we still haven't had time to work out how much to shrink it. Yeah, this was supposed to be the big announcement, but it's just been really busy - you know how it is. We're going to get around to you. Pretty soon. And pretty deep. But we don't know which parts to lop off, not just yet. Back to work, everyone!"

Comments (61) + TrackBacks (0) | Category: Business and Markets


1. Matt on February 3, 2012 8:00 AM writes...

Would you prefer that they keep their employees in the dark until the day of the cuts, depriving them of an opportunity to find a job elsewhere without having to go through the indignity and humiliation of being laid off?

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2. Industry Guy on February 3, 2012 8:37 AM writes...

They tell employees so that they do go look for a job elsewhere and dont have to pay them severence when the time comes.

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3. You're Pfizered on February 3, 2012 8:59 AM writes...

Would you prefer that they keep their employees in the dark until the day of the cuts, depriving them of an opportunity to find a job elsewhere without having to go through the indignity and humiliation of being laid off?

What jobs elsewhere?

It's like being able to find out the exact day your are going to die. If you could, would you?

There is no indignity or humiliation getting laid off, not anymore. It's business, not personal. Don't take it personally. Take your severance and move on. What used to be a stigma is simply the price of working in an industry that's shedding jobs by the barge-full. Besides, walking away with a severance package gives you a bit of time to plot your next move. Couple this with collecting unemployment and you can can weather the poor job market for a bit longer, or opt to go in another direction.

Since this industry is shedding jobs all the time, if you aren't always looking for that next job, you're in denial. Best case scenario is that you have something in hand when they let you go...

The outfit I work for doesn't make these broad announcements, you come into work one Wed or Thurs morning and it begins. I had advance warning that last year's layoffs were coming and I didn't sleep at all that night. I preferred not knowing, like when I was laid off several years ago. The shock wears off and you move forward.

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4. CanChem on February 3, 2012 9:05 AM writes...

@2 - Yep, one of my best friends was at Pfizer in MA, and rather than wait for the openly announced axe to fall he jumped ship and joined another company, thinking at the time he was so smart to get a job before the market got flooded with his coworkers. Except when the final cuts came it worked out that he lost 9 months severance, a fact he brought up on a near-weekly basis.
His experience was that Management actively encouraged people to jump, thereby saving cash, but as Derek previously expounded, at incredible cost to dedication of all who remained.

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5. lynn on February 3, 2012 9:24 AM writes...

I don't know how people live with the long term dread. And of course there are many refugees [from other companies' slashings] at AZ-Waltham. Good luck to all...

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6. DannoH on February 3, 2012 9:25 AM writes...

I agree with #3 - I walked into work on a Friday morning and HR was directing everyone into the breakroom (lucky it was a small facility). The Plant Manager gave a speech, and HR immediately started processing people out the door. It was much better to be surprised and have it over with at the same time, rather than agonize over the anticipation of what is coming.

Completely agree with always keeping your eyes open for the next job. If you are not interviewing every three months just to keep your skills sharp and name circulating, you are going to be behind the curve when the time comes to hit the bricks.

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7. DJ DrZ on February 3, 2012 9:34 AM writes...

I have been laid off twice (no humiliation in it, #1 Matt, it is just business). The first time was swift and "easy" for lack of a better word. We weren't expecting our dept to get axed, it did without warning. The second time, I had been worried about my job since rejoining the department I had left (in one of many lets move people around moves that mgt does in order to justify their existence). Then it happened, the day I got back from international travel. I prefer option #1 over #2 any day of the week, and twice on Sunday.

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8. Michael Corleone on February 3, 2012 9:59 AM writes...

Now, look, Carlo, it's been a very busy time for the family. We know what you did with the Barzinis, and we know you set up Sonny. Did you think you could fool a Corleone?

But as I said, it's been busy around here, so we're gonna take a few days, we're going to look around, do some analysis, do some Six Sigma regressions, and then we'll figure out whether or not we're going to terminate your relationship with the family and whether or not we'll decide to take matters further. Okay?

Hang around the mall for a few days, have a drink, feel free to go to the track. We'll talk soon.

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9. luysii on February 3, 2012 10:07 AM writes...

If new effective drugs were being discovered all the time there would be no layoffs. The reason they are not being discovered, is that drugs are agents trying to alter a system that is only dimly understood (the cell and its interactions with other cells).

One analogy is the way people tried to deal with infection before Pasteur. They were able to classify them fairly well without knowing the causes. Even advances in hygiene helped (Google the Broad Street Pump). Some treatments although barbaric (such as Mercury for syphilis) were somewhat effective -- this led to the expression One night with Venus, 6 months with Mercury.

For 20 or so examples of how little we understand the system see

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10. anonymous on February 3, 2012 10:09 AM writes...


Hate to tell you this, but unless you are

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11. johnnyboy on February 3, 2012 10:37 AM writes...

Agree with all the responders to #1 Matt. I was with Pfizer at the time of the Pharmacia acquisition and subsequent re-org. Although I knew my division was safe, my girlfriend worked in another division that was a probable target; it might stay, it might move to another site, it might be sold - no one would tell them. The wait for the announcement went on for months. Work in her division ground to a halt, as all projects were essentially put on hold. Morale was below zero; the uncertainty and complete powerlessness she felt made her cry practically everyday, and made me extremely angry at the company. Different rumors about their fate were appearing every week. Mid level management kept telling them they didn't know anything, but when after almost a year it was finally announced that her entire division was being moved across the country, turns out many mid-level managers had already bought houses at the new site. The whole experience left us disgusted about the company, and really about a system that treats its workers like interchangeable pee-ons. A sudden announcement would have been immensely preferable.

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12. drug_hunter on February 3, 2012 10:41 AM writes...

My advice to the AZ folks would be: use this time to write papers, build networks, learn some new skills, go to conferences, and get caught up on the literature. In short, treat this as a golden opportunity to refresh your own career.

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13. ano2 on February 3, 2012 10:50 AM writes...

It's just like manyother company's do it. Particularly as they all consult outside "avisory experts" who just recycle their wares.

In geneal, upper management anagement first decides they need to save money in R&D spends, pick a target for valuation saving, and then have to figure out how to match in organization changes. Enter the game of friendships, politics, biases, concepts relate savings by outsouring, consolidation of responsibilities to cut positions, "top heavy" (eg high wage earners) staffing, etc, "preferred" areas for future internal R&D spends, etc, and magically comes the "new organization".

Pfizer, GSK, Merck, AZ....all similar schemes within small variation.

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14. OldLabRat on February 3, 2012 11:37 AM writes...

Johnnyboy is right on target as Mr. Mackay is using the exact same language and processes at AZ he did at Pfizer.

In Groton, many folks followed the advice of drug_hunter in #12 and were less miserable. Several also identified a new job and were able to set the start date post-severance. I'm not sure that's possible in the current job market.

Having been through this, both fast and slow; fast is preferable by far. It's still a shock, even if you know it's coming, but at least one can start getting past it sooner.

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15. anchor on February 3, 2012 11:44 AM writes...

Let me also pitch in my few cents worth- There are no perfect settings in these job climate especially in pharmaceutical industries. If you are Ph.D (with some years behind you) then the wait is worth and then you walk off with separation package and then some. I am informed that many at Merck @ Rahway site opted for that. Understand that Ph.D (especially if you are over 45y) jobs are a rare commodity, unless you are freshly minted. Hence I would wait. Similar advice also for MS and BS graduates (with some experience) except that you stand better chance of landing your next job.

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16. luysii on February 3, 2012 12:09 PM writes...

Take if from a retired doc, who's had to give people bad news many times -- there is simply no good way to do it. As is the case here, the anger is directed at the way the news was given (and the giver) rather than the news itself (which can't be changed in most cases).

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17. CR on February 3, 2012 1:02 PM writes...

First, let's please stop calling these "lay-offs". This isn't what is happening, people are being fired. My father worked for Chrysler in the 70's and he was laid off - to be called back based on seniority at a later data. He was, in fact, called back a couple months later. I went through this several years ago when the company I was working for decided to reduce head count - I was not "laid off" I was, in fact, fired.

Second, the companies don't care about morale or how this is going to impact productivity. If they did, they would not be doing what they are doing. What the upper management really wants to do, is drive people away so they don't have to pay severance. It's clear as day. As Derek states: "A less motivating environment couldn't be engineered on purpose." You don't think this is on purpose? Of course it is.

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18. Nick K on February 3, 2012 1:38 PM writes...

@17; "Never ascribe to malice what can be explained by incompetence" (Robert Heinlein). While it's tempting to accuse senior management of Macchiavellian tactics, more likely they themselves are floundering around in the dark. Remember, they themselves are under huge pressure from institutional shareholders unwilling to wait. The big difference from the rest of the workforce is the size of their salaries and severance packages. That's the real scandal.

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19. Lester Freamon on February 3, 2012 1:51 PM writes...

Ah, AZ Waltham, one of the biggest anti-infective discovery centers in America.
It's cool, we don't need any more antibiotics, we'll be fine, the bacteria will just probably become more sensitive to the old drugs and everything will work itself out.

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20. SwedenCalling on February 3, 2012 2:02 PM writes...

Same shit is happening at the Mölndal site. Up to 200 FTEs (not people) will be made redundant. I will keep low and follow drug hunters might even benefit AZ if I come up with something bright. My 2p back is do not let the morons get to you. Easier said than done. / Greetings from a drug hunter considering alternative careers

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21. Pig Farmer on February 3, 2012 2:16 PM writes...

@CR. Absolutely spot on, I'm sad to say. Same thing happened to me at my former work place.It used to be called "constructive dismissal". After humiliating me for 6 months, my supervisor made a half-hearted attempt to get me to resign, thus saving the company on severance pay and health insurance. I refused, and was subsequently fired.
The work place has become a real jungle.

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22. Winston Churchill on February 3, 2012 2:26 PM writes...

Many studies have shown that the anticipation of pain is much worse than pain itself. The sudden announcement that you are being fired is far preferable to months of agonizing, lost morale and productivity. Nick K is correct - pharma firing practices are not motivated by malice, it's simply emblematic of the slow decision making that cripples big pharma.

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23. SeenThisBefore on February 3, 2012 2:34 PM writes...

Three points stick out at me.

1. We've seen this movie before. Mackay presided over the destruction of Pfizer's R&D and now he is given the keys to AZ's R&D. The guy Mackay replaced - Jan Lundberg - ran the ship aground at AZ and picked up where he left off at Lilly. Don't these companies ever learn? No wonder they are a breeding ground for management consultants. Which leads me to No. 2...

2. AZ boasts that 60% of its senior leadership has come from outside pharma. Somehow the prospect of Joe Blow who sold widgets firing up a "branding plan" for a Phase 1 candidate is nauseous. It's clear from the literature that the halycon days were over when the marketing clowns took over - now we have CIG; fines; lawsuits; investigations; cooked articles; off-label promotion. 'Nuff said there.

3. The stcok buyback program is designed to do one thing and one thing only - reduce the number of outstanding shares and float the stock price to ward off the corporate raiders. Or more cynically, to jack up the stock price so that the upper crust can get even more when the golden parachutes are handed out in the wake of the buyout. And that is where this is headed - the AZ pipeline has been in steady and consistent decline since 2002 or so. Nothing's left to fill the gaps. The endgame is written - it's just a matter of time.

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24. Anonymous on February 3, 2012 2:36 PM writes...

If it is any comfort, by the third time you have been through the dread of potential severance, behavior analysis, slating and selection you get used to it. You lose any notion of morale, enthusiasm, loyalty or commitment in the organization and become "change agile"

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25. Jim on February 3, 2012 2:38 PM writes...

It's beyond disheartening to watch this continue to happen.

I'll say this about ways of laying people off (or firing them, if you prefer) - there is NO good way to do it. Simply pick your poison. I've heard countless different methods employed, none of which sound good. On the other hand, everyone clearly thinks one is much worse than the others, and nobody agrees on which one that is.

But if you think they try and get people to resign to save on severance, you're simply wrong. Ask anyone in finance - severance does not count against EBITDA, which is the new (fake) number that represents the company's financial health and is a huge driver on Wall Street. It affects cash, but that's really not an issue.

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26. Ginsberg on February 3, 2012 3:02 PM writes...

I think luysii is onto something, "If new effective drugs were being discovered all the time there would be no layoffs. The reason they are not being discovered, is that drugs are agents trying to alter a system that is only dimly understood (the cell and its interactions with other cells)."

We have the hardest job in the world. Cure cancer? Using what? When? Okay boss.

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27. bbooooooya on February 3, 2012 3:10 PM writes...

'First, let's please stop calling these "lay-offs"'

Yes, far too harsh a word. 'Right-sizing' is a much much kinder, gentler way to described getting canned.

I would love to find the A$$hole from BCG or Mckinsey who coined that phrase.

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28. Publius The Lesser on February 3, 2012 4:44 PM writes...

Understand that Ph.D (especially if you are over 45y) jobs are a rare commodity, unless you are freshly minted. Hence I would wait. Similar advice also for MS and BS graduates (with some experience) except that you stand better chance of landing your next job.

I suppose the question is: why do companies prefer newly-minted PhDs over older PhDs with industry experience?

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29. fredo on February 3, 2012 4:52 PM writes...

I agree with #3 - being told you might be laid off doesn't give you time to prepare, because you don't know what to prepare for. It just gives you time to be stressed and unhappy.

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30. CR on February 3, 2012 5:04 PM writes...

@28, Publius the Lesser:
"I suppose the question is: why do companies prefer newly-minted PhDs over older PhDs with industry experience?"

$$$$$$ for starters.

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31. Publius The Lesser on February 3, 2012 5:17 PM writes...

@30, CR

@28, Publius the Lesser:
"I suppose the question is: why do companies prefer newly-minted PhDs over older PhDs with industry experience?"
$$$$$$ for starters.

Which is another way of saying that part of an older PhD's value is their institutional experience as opposed to their industry experience. If salary is the issue, perhaps it needs to become culturally expected and accepted for older workers to ask for a lower salary to reflect that part of their intellectual capital that is no longer applicable to their new job?

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32. Susurrus on February 3, 2012 5:28 PM writes...

I've been thinking and I've decided that big pharma is living the plot of the movie, The Highlander. Cutting off each other's heads to recieve "The Quickening" (although, it seems, sometimes they cut off their own head - in which case I'm not sure who gets the prize. Not me, that's for sure). THERE CAN BE ONLY ONE! (but which one will it be?)

(Apologies in advance. I'm just a nerd having a little fun)

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33. Another Kevin on February 3, 2012 5:30 PM writes...

And they tell employees so that the best and brightest among them - and hence the most capable of finding places elsewhere - will leave. Since those employees are typically the most expensive ones, that's a tremendous cost saving, and since all employees are equivalent and interchangeable, those are the ones it's most expensive to get rid of.

See also, "lean and mean":

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34. anchor on February 3, 2012 5:46 PM writes...

#28- What I wrote, I have seen that happen and I myself (45+ y) is paying that price. I am talking of only those who were a bench chemist. As to why the fresh PhD's are preferred, may be they bring fresh ideas and vigor. These days, speed is the name of the game in drug discovery and not experience or intellect. I also agree with #30-I do not know who said it (H.L. Mencken?)but when they tell us it is not about the money, it is about the money.

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35. GreedyCynicalSelfInterested on February 3, 2012 7:35 PM writes...

Aren't you glad that you got that Ph.D.?

There's a graduate student born every minute!

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36. anonymous on February 3, 2012 9:21 PM writes...

Theres not a morning I wake up that I don't think about the tremendous mistake I made in getting a PhD. It absolutely baffles me that students are burning the best years of their life to be unemployable.