Pharma giant Merck will restructure its manufacturing and supply network, which will include facility closures and layoffs that will cost up to $1.2 billion to implement, according to Endpoints News.
The cuts, announced in a securities filing April 30, are expected to take place by 2023. The drugmaker didn't disclose how many jobs would be lost or the number of facilities that would be closed.
The drugmaker expects to incur up to $1.2 billion in charges from the restructuring effort, including about $500 million in charges this year and about $800 million to $1.2 billion when the effort is complete in 2023.
About 55 percent of the costs are expected to be paid out in severance and separation. The other "45 percent of the cumulative pretax costs will be non-cash, relating primarily to the accelerated depreciation of facilities to be closed or divested," Merck's statement reads.
The restructuring is part of Merck's global initiative focusing to reduce its real estate footprint and optimize its manufacturing and supply network, according to the report.