AZ Restructures, To Build New HQ

AstraZeneca will engage in a new restructuring plan, shedding 1,600 employees and relocating another 2,500 as it reorganizes its R&D structure and reduces its marketing staff over the next three years.
 
Once the plan is enacted, AZ’s small molecule and biologics R&D activities will be concentrated in three strategic centers: Cambridge, UK; Gaithersburg, MD; and Mölndal, Sweden. The locations were chosen due to their proximity to bioscience clusters, “making it easier to access world-class talent and opportunities for collaboration and partnerships,” according to an AZ statement.
 
AZ will invest approximately $500 million to establish a new, purpose-built facility in Cambridge, UK. The site will consolidate AZ’s UK-based small molecule and biologics R&D. Cambridge will also become AZ new global corporate headquarters. Gaithersburg will become home to much of the company’s U.S.-based Global Medicines Development activities for small and large molecules and will accommodate some global marketing and U.S. specialty care commercial functions. That site contains MedImmune’s headquarters and is the primary location for AstraZeneca’s biologics activities. AZ’s site in Mölndal, near Gothenburg, will continue to be a global centre for R&D, with a primary focus on small molecules.
 
As a result of the restructuring, AZ will end R&D work at its Alderley Park, Cheshire, UK site, forcing a relocation of 1,600 employees to Cambridge, as well as the company’s nearby Macclesfield manufacturing facility or other AZ sites overseas. At least 700 non-R&D roles are expected to remain at Alderley Park.
 
AZ’s  Wilmington, DE site will lose approximately 1,200 employees, with a net gain of 300 in Gaithersburg. There will be an overall reduction of 650 positions in the U.S., with an additional 170 people to relocate to other AZ sites in the U.S. or overseas. Wilmington will remain the North America commercial headquarters, with 2,000 employees.
 
In London, the majority of corporate and global commercial roles based there are expected to move to Cambridge, with some going to other sites. Following the transfer of the HQ to Cambridge, AZ’s Paddington office will close by 2016. Currently, around 350 roles are based in London.
 
In total, the moves will lead to 1,600 layoffs and the relocation of 2,500 employees from 2013 to 2016, at a cost of $1.4 billion, in addition to the $500 million expense of building the new HQ in Cambridge. Expected annual savings are around $190 million.
 
Pascal Soriot, AZ’s chief executive officer, remarked, “The changes we are proposing represent an exciting and important opportunity to put science at the heart of everything we do because our long-term success depends on improving R&D productivity and achieving scientific leadership. This is a major investment in the future of this company that will enable us to accelerate innovation by improving collaboration, reducing complexity and speeding up decision-making. The strategic centers will also allow us to tap into important bioscience hotspots providing more of our people with easy access to leading-edge academic and industry networks, scientific talent and valuable partnering opportunities.
 
“I recognize that our plans will have a significant impact on many of our people and our stakeholders at the affected sites. We are fully committed to treating all our employees with respect and fairness as we navigate this important period of change.”