Pfizer (NYSE:PFE) on Wednesday said it has launched a new multi-year program to reduce costs as it works to rebound from the rapid decline of its COVID business.
The announcement is in addition to another $4 billion cost-cutting effort, which Pfizer announced last year as demand for its COVID vaccine and oral drug Paxlovid slumped.
In a securities filing, the pharmaceutical giant said the first phase of its new program is focused on operational efficiencies and is expected to save the company about $1.5 billion by the end of 2027.
One-time costs related to the initial stage of cuts are expected to be about $1.7 billion, including severance for an unspecified number of laid-off employees. The company expects to record the majority of those charges this year.
Pfizer also expects the program to involve “product portfolio enhancements” and changes to the company’s manufacturing and supply network.
“The program will focus on streamlining our ways of working, reducing complexity and increasing productivity in Pfizer Global Supply,” the spokesperson said in a statement.
Pfizer in the filing added that “given the complexity in manufacturing and longer lead times required to make changes, this program will be a multi-phased effort.”
PFE shares dipped 78 cents, or 2.6%, early Thursday morning to $28.82.
