Face to economic crisis, rivalry and rapid technologic evolution, many large pharmaceutical firms adopted the corporate strategy of downsizing by laying off a great number of employees (Essays, 2018). In 2007, because of economic crisis, nearly 80,000 workers lost their jobs; several mergers took place such as Merck-Shering, Pfitzer-Whyeth and Roche-Genentech. Other pharmaceutical firms such as Amgen, Genetech and Gilead fall into capital lack, and obliged to reduce corporate costs through staff cuts.
Amylin, at the end of 2008, face to a sharp decline in diabetes drug sales, cut 340 jobs; and then continued to close 200 agencies in mid-2009. Also, in 2009, Sepraror fired 20% of the workforce and closed more than 410 sales agencies; Allergan reduced the workforce by 5%; Oscient cut about 100 jobs in February 2009, and 180 jobs in June 2009. Xenoport, a pharmaceutical firm headquartered in San Jose, announced to cut 222 employees in objective of saving 15.6 million USD in each year for investing in future drug products. In 2011, Exelis, a biotechnological leader cut about 40% of its workforce by saving nearly 90 million USD in order to finance the final development stage of anti-cancer drugs such as XL184, XL147 and XL165.
However, it has not been clear whether the downsizing strategy contributes positive or negative firm performance in pharmaceutical industry. Although the staff cuts consist in the underperforming ones, some good skilled staffs are still cut for minimizing costs. This makes the poor situation in pharmaceutical industry because of the fact that the process of developing any drug takes up to 15 years, that requires great commitment and development of high qualified, specialized and experienced staff in a group (Essays, 2018).