Mass Layoffs Hit Eli Lilly & Co as Drugmaker Closes Manufacturing Sites

Indianapolis - April 2016: Eli Lilly and Company VII

Eli Lilly Laying Off 3,500 Employees in Cost-Saving Efforts

Drug manufacturer Eli Lilly & Co (NYSE:LLY) has announced that it is shedding about eight percent of its global workforce and is closing down a number of its manufacturing sites as part of an effort to streamline operations and cut costs.

The downsizing will primarily result from voluntary buyouts being offered to U.S. employees who are eligible for early retirement. The remainder will be from layoffs due to site closures. A total of 3,500 employees are expected to lose their jobs, of which 2,000 are estimated to be from its U.S. operations.

Eli Lilly currently employs a global workforce of about 41,240 workers, with more than 18,500 employed within the United States.

As part of its cost-cutting plan, the Indianapolis-based company says that it is moving its manufacturing facility in Larchwood, Iowa, to another plant in Fort Dodge, Iowa. Moreover, a research and development (R&D) office in Bridgewater, New Jersey, will also be closed as the company streamlines its R&D activities. A number of other sites will also face operational consolidation.


Eli Lilly expects to save about $500.0 million in annual costs, starting in 2018. Some of these savings will be directed toward further improving the company’s cost structure, while the remainder will be reinvested in the business to develop new medicines.

The announcement comes at a time when EIi Lilly’s patents for a number of its medicines are expiring this year. Following their expiration, the company’s drugs will be competing with other generic drugs in the market. Generic competition results in price wars between drugmakers and forces them to take shrinking profit margins.

In a preemptive move, Eli Lilly is now redirecting its resources to the development of new medicines.

Nonetheless, the closures of Eli Lilly’s manufacturing plants, and the associated losses of manufacturing jobs, come as America’s manufacturing sector loses hundreds of valuable jobs to offshoring, despite President Donald Trump’s repeated promises to save those jobs.


Lilly Takes Steps to Streamline Business, Invest in New Medicines and Drive Growth,” Eli Lilly & Co, September 7, 2017.

Eli Lilly to Cut 8% of Global Workforce, or 3,500 Jobs,” The Wall Street Journal, September 7, 2017.


Categories: Job Cuts, News