Report: Development IT hit hard in Novartis cutbacks

Over the first few months of 2014, Novartis ($NVS) quietly began laying off workers, shedding an estimated 3,000 jobs in four months. Now BioSpace has provided details of where the ax has fallen and why, with development IT teams suffering heavy job losses.

An anonymous source told the publication Novartis laid off half of its development IT employees. As part of the process, Novartis reportedly shut down the data management department at its site in East Hanover, NJ, and bought a CRO in India. The transition of data management and other tasks to a site in Hyderabad, India, was reported earlier this year as part of the blitz of layoffs and cost-cutting measures.

Novartis confirmed it had made cuts, telling BioSpace 175 workers in U.S. development teams and other groups were informed their jobs were at risk in April. Notices on the New Jersey Department of Labor and Workforce Development website suggest that 202 positions at the East Hanover site were affected by the April cuts. Further layoffs are reportedly scheduled for September and possibly November, too.

BioSpace framed the cuts as part of a strategy at Novartis to increase outsourcing of clinical development work. In recent years Novartis has outsourced medical coding work that used to be handled by its Horsham, United Kingdom, site and in May it struck a $500 million infrastructure management deal with Indian IT services company HCL Tech. Moving IT to India--whether to in-house sites or third parties--is a popular strategy given the lower costs and large, talented labor pool.

Some IT jobs are staying in the West, though. Last week Novartis-owned Alcon Laboratories revealed plans to build a $35 million data center in Fort Worth, Texas. And the IT hub Novartis opened in Prague, Czech Republic, in 2012 is still active and recruiting staff.

- read the BioSpace article

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