Eli Lilly expects 3,500 job cuts as part of streamlining plan

Eli Lilly (NYSE: LLY) has set out plants to streamline operations to more efficiently focus resources on developing new medicines and to improve its cost structure, as the US pharma major deals with pressure on the price of some of its biggest products.

Lilly’s shares closed up 1.9% to $83.05 on Thursday following the announcement, but drifted back 0.66% to $81,00 in after-hours trading.

Global workforce reductions, including those from a US voluntary early retirement program, are expected to impact approximately 3,500 positions, or around 8% of its workforce.  With the streamlining efforts announced, the company expects annualized savings of about $500 million that will begin to be realized in 2018. These initiatives are part of a broad productivity plan underway at the company to improve its cost structure, particularly fixed costs.