Shire is pushing ahead with plans to shift workers out of Pennsylvania and into its Boston-area headquarters, a major reorganization that the big biotech anticipates will trigger a "mass layoff," according to an official notice filed recently. The biotech filed a WARN letter with the state of Pennsylvania outlining plans to downsize its operations at its Chesterbrook, PA, campus by up to 600 staffers, but has yet to determine who will go to Massachusetts and who will face the ax.
The Shire letter, sent in late January by a company lawyer named Lawrence Borska, says that the company is starting to transfer jobs from its Chesterbrook, PA, facilities to the Lexington, MA, headquarters this month and will continue for the next year. An "anticipated mass layoff" is expected to begin in a matter of weeks.
"It is anticipated that the layoffs will begin in April, 2015 and will be completed by the end of March, 2016," says the letter from Shire, which was forwarded to FierceBiotech by state officials Friday morning. "The number of layoffs is not clear at this time, as it is dependent on the number of employees who accept offers to relocate to Massachusetts; however this entire undertaking could result in an employment loss of approximately 500-600."
The initial word about the notice was reported by the Philadelphia Business Journal, which adds that the reorganization will leave 250 to 300 workers in Pennsylvania.
"We expect that there will be some jobs eliminated, but the decision to relocate jobs from Pa. to Mass. is driven by our effort to increase efficiencies and greater alignment and execution of priorities between the company's commercial and research and development (R&D) teams to more effectively bring innovative products to market," a spokesperson for Shire tells FierceBiotech.
Shire ($SHPG) announced last November that it would be relocating R&D and commercial staff to the biotech Mecca in Massachusetts, following a path that has been blazed by Pfizer ($PFE), Novartis ($NVS) and others while joining a migration that also includes Amgen ($AMGN) and Baxalta. Many leaders in biopharma believe that it's important to be where the action is in drug discovery and development, and that sentiment has paid off in the booming supercluster in Cambridge/Boston.
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| Shire CEO Flemming Ornskov |
The effort is a continuation of the drugmaker's "One Shire" effort, through which the acquisitive company is working to pare down its global reach into two principal locations, in Massachusetts and Switzerland. CEO Flemming Ornskov, who already works out of Lexington, has long preached the virtues of integration, leading the charge to marry Shire's then-disparate R&D operations upon taking the reins in 2013.
Since AbbVie ($ABBV) gave up on its deal to buy Shire last year, Ornskov has been buying up companies large and small, determined to one day match rivals like Biogen Idec ($BIIB). The buyout spree most recently led to a $245 million deal for Meritage Pharma, which followed a $5 billion deal for NPS as well as other acquisitions. Shire came out of its broken AbbVie relationship with more than $13 billion in the bank to fuel an M&A spree.
- here's the report from the Business Journal