The pressure from activist investors Bill Ackman has forced Zoetis Inc (NYSE:ZTS) to cut as many as 2500 jobs over the next 18 months time. As per the reports, the company was recently spun off by Pfizer Inc. (NYSE:PFE) and facing a lot of pressure from Ackman to diminish.
Road So Far:
Zoetis is one of the leading drugmakers in the world and known for offering best in class product and services. The decision of cutting down as many as 2500 jobs was not an easy one; hence, it had opted to make it public through a conference call rather than calling a public meeting. The company runs its operations at four global sites as of now, but after this issue, the company has decided to cut down its global divisions from four to two. Apart from this, it will also sell ten of its manufacturing sites in a few months time.
The announcement was made by the company on Tuesday. A rough estimate suggests that the move taken by Zoetis to cut down its expenses will entail close to $500 million in one-time sundry charges. As soon as this step is executed, the operating profit for year 2017 of Zoetis will elevate by $200 million.
It’s one of the most difficult times for those executives who have lately started their career with the company. Experts call it a negative step that will affect the investors’ trust in the coming days. Even though, Bill Ackman has created a lot of pressure on the management of Zoetis, but he hasn’t come out in open and commented on this issue yet.
So far, Pfizer Inc. (NYSE:PFE) hasn’t also commented on this job cutting issue, but experts anticipate that the company will have to come forward to defend the decision of Zoetis in the near future.