updated: 10/14/2004 3:46:35 PM

Lilly to Cut 575 Positions

  to Lilly Spokesman Phil Belt talk about the direct impact in Indiana.

Eli Lilly and Co. (NYSE:LLY) has announced a sweeping restructuring of its U.S. operations in an attempt to cut costs and become more competitive. The changes include the elimination of 575 positions in the United States, impacting less than 100 in Indiana. Lilly workers whose positions are being cut will be able to post for new jobs elsewhere in the company. The restructuring is being called a first step in efforts to boost the company’s position in the increasingly competitive pharmaceutical industry.

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Details of changes within Lilly’s U.S. affiliate

Overview

· Lilly USA leadership today announced a number of changes aimed at reducing the U.S. affiliate’s cost structure and improving the efficiency and effectiveness of its operations. The changes touch virtually every part of the company’s Lilly USA business.

· John Lechleiter, Ph.D., executive vice president for pharmaceutical operations spoke this morning to U.S. affiliate employees via a web cast and teleconference.

· These actions are not just about streamlining the Lilly USA organization – they’re about making Lilly USA more competitive in an increasingly challenging environment and positioning the affiliate for the future.

Jobs eliminated and reallocated employees

· All told, the changes will impact about 575 employees, who will be reallocated since their positions are being eliminated.

· These reallocated employees will be given the option to post for new jobs elsewhere in the company. Those who choose not to stay with the company will be offered a severance package.

· Management has expressed confidence that the company will be able to offer every reallocated employee a position. However, we know we will not be able to find a perfect fit for every person, and flexibility on the part of employees will be critical to making this work.

Further details of the organizational changes, which begin immediately, are:

· Acute care and primary care sales territories will be reorganized. The acute care group will reduce the number of sales districts and territories, along with the overall staffing levels to better reflect business realities. In primary care, a variable staffing model will replace the current staffing model, in which all territories have the same number of sales professionals. In the new model, territories will be staffed to better meet customer needs and to maximize sales potential.

· Neuroscience marketing teams will be restructured. Several brand teams (Zyprexa, Cymbalta™, Strattera®) will be reduced in size, while Symbyax®, which previously was part of the Zyprexa® brand team, will be established as a separate team to drive greater brand strength.

· Parts of the business-to-business (B2B) unit and U.S. medical division will be restructured to gain efficiencies. The B2B organization, for example, will resize its public health division as well as strategic marketing and customer business solution functions. U.S. medical will restructure clinical operations, reduce medical liaison support, and centralize regulatory activities and implement cost improvement measures in areas such as new clinical trials and continuing medical education.

· All district and regional sales offices will be closed. In all, 43 offices will be closed by mid-November. Field-based sales management and support staff (including sales supervisors, trainers and human resources employees) will work from home-based offices. The office closures bring Lilly USA in line with current industrywide practices.

Of note

· These decisions were made with sensitivity toward both employees and customers. While the company recognizes that some business disruption is inevitable, particular attention was paid to maintaining relationships with our customers and providing sufficient support for current and near-term product launches.

Source: Eli Lilly and Co.

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