Downsizing Pfizer begins summer of layoffs

The largest waves of layoffs so far have begun at Pfizer Inc.'s research and development facility in Ann Arbor, which the pharmaceutical giant is shutting by the end of next year.

Pfizer laid off 50 employees earlier this month, and is cutting between 50 and 150 people in two-week cycles through the rest of the summer. The company anticipates that by the end of this year, the number of employees in Ann Arbor will be down to 400, spokesman Rick Chambers said.

Pfizer announced its plans to shutter the facility in January as part of a corporate restructuring that aims to cut 10,000 jobs worldwide and save $2 billion a year. At the time, the Ann Arbor site employed 2,100 people. Pfizer said it would cut 2,410 Michigan jobs total, including 60 in Plymouth Township at a biotech operation called Esperion and 250 from a Kalamazoo research site.

The cost reduction plan was Pfizer's second in as many years, and came after safety issues forced it to halt the development of a key drug in its pipeline -- torcetrapib. The cholesterol drug was expected to replace sales of the best-selling Lipitor when it loses market exclusivity in 2010. The company is also facing fierce competition from generic drugs.

Slightly more than half of 1,000 Ann Arbor employees who Pfizer offered other jobs in the company have accepted the transfer offers. Most will go to the Pfizer site in Groton, Conn., Chambers said. In addition to relocation assistance, Pfizer will kick in extra help, up to $100,000, for transferring employees who sell their homes for less than the assessed value.

Severance packages for those who leave the company include 13 weeks' pay minimum, plus another three weeks for each year of service. Laid-off employees also have access to Pfizer job search tools, counseling and internal job postings for 60 days after their termination date.

"It's a difficult process but we're trying to make it as smooth as possible for those affected," Chambers said.

Pfizer has arranged for the University of Michigan to take over leased laboratory space near its Ann Arbor campus. The company is still in the process of identifying a broker for its complex and does not expect to make any decisions on what it will do with the space until at least next year, Chambers said.

For Ann Arbor Spark, the economic development organization working to retain Pfizer talent in the area, there's a bright spot in the news that only about 500 employees have accepted transfers. "There's still a very significant number of the population that will be available to us," said Mike Finney, president and CEO of Spark.

Spark is working with 23 groups of Pfizer employees to help them form startups, Finney said. And 200 hundred companies in southeast Michigan have offered to hire Pfizer employees, posting nearly 600 job openings through Spark.

The combination of efforts "gives us pretty good hope that many of them will choose to stay," he said.