IMS Health to Slash Headcount as Profit Falls

Pharma market research giant IMS Health has reported a 19% drop in Q2 profit to $62.9m from $77.7m a year earlier. Accordingly, the firm is planning to shed a total of 850 staff, or 11% of its global workforce.

The company has also warned that it is likely to miss its full-year projections, and has implemented a series of restructuring initiatives to bring down costs, and realize annual savings of $80-$85m by 2011.

In the second quarter, revenue fell 13% to $522.8m (2008: $600.7m), and the company expects that its full-year range for earnings, excluding items, could fall 10 cents below its prior projection of $1.70 to $1.77 per share.

Revenues for the first-half of 2009 were down 11% to $1,049.8m, compared with revenue of $1,174.9m for the first half of 2008. Net income was $196.2m, compared with $136.9m in the first half of 2008.

IMS Health's restructuring plan includes the loss of 500 jobs in Europe, where the company is reducing and consolidating operating units. In addition, 170 positions will be made redundant in the US and the company says it will not be filling current vacancies.

The firm, which employs 7,467 people, will also be streamlining its operations in Europe, the Middle East and Africa, and reducing the size of its sales and management consulting teams in areas where demand is low.

Instead it plans to focus on higher-growth regions and on parts of its business such as specialty pharmacy and patient-centered research.

CEO David Carlucci commented: 'While we planned for lower growth coming into 2009, the accelerating healthcare market dynamics compounded by an economic downturn have caused our customers to significantly rein in their spending. As a result, we are taking decisive actions to lower our cost structure and better position the business for a return to growth.'

Web site: www.imshealth.com .