INDIANAPOLIS - Indianapolis-based Eli Lilly and Co. (NYSE: LLY) has announced a global restructuring, including work force reductions expected to impact about 3,500 workers. The company expects the moves to lead to about $500 million in annual savings beginning next year. The pharmaceutical giant says the cuts will include site closures in Iowa, New Jersey and China. Chief Executive Officer David Ricks says the restructuring will allow the company to reduce costs and "invest in the next generation of new medicines."

Lilly says it expects the majority of eliminated positions to come through a voluntary retirement program in the U.S., with those participating receiving enhanced retirement benefits. The company plans for that program to be largely completed by the end of the year.

As part of the restructuring, the company plans to move production from an animal health manufacturing facility in Larchwood, Iowa to an existing plant in Fort Dodge, Iowa. Lilly also says it will close a research and development office in Bridgewater, New Jersey and the Lilly China Research and Development Center in Shanghai, China.

Moving forward, the company says it will continue to evaluate the need to further reduce costs and improve efficiencies. It says those efforts could include additional work force adjustments.

"The commitment and perseverance of our people, who never give up on our mission of tackling hard-to-treat diseases, make up our legacy of more than 140 years," says Ricks. "We will implement changes with fairness and the utmost respect for our Lilly colleagues, while we remain a vibrant, thriving competitor."

Lilly expects to incur a charge of $1.2 billion through the effort, resulting in a reduced earnings per share guidance in 2017.