Merck this week announced a cost-cutting plan to save $3 billion by the end of 2027 to reinvest support in new products and its therapeutic drug pipeline.
During a Q2 earnings call Tuesday, the company that it expects to eliminate an unspecified number of administrative, sales and research-and-development positions, but it would continue to hire new employees for positions in strategic growth areas of its business.
Merck has approximately 75,000 employees worldwide, including about 6,000 at its global headquarters in Rahway. In 2024, total revenue was $64.2 billion from its pharmaceutical, vaccines, and animal health businesses.
"Earlier this month, we were pleased to announce our pending acquisition of Verona Pharma, which augments our portfolio and pipeline and is another example of acting decisively when science and value align,” Merck Chairman and CEO Robert Davis said.
“Today, we announced a multiyear optimization initiative that will redirect investment and resources from more mature areas of our business to our burgeoning array of new growth drivers, further enable the transformation of our portfolio, and drive our next chapter of productive, innovation-driven growth,” Davis said.
“With these actions, I am confident that we are well positioned to generate near- and long-term value for our shareholders and, most importantly, deliver for our patients,” he said.
The company said it will also reduce its global real estate footprint and continue to optimize its manufacturing network.
The $10 billion acquisition of Verona Pharma, announced on July 9, expands Merck’s pipeline and portfolio of treatments for cardio-pulmonary diseases. Through this acquisition, Merck will be adding Ohtuvayre, the FDA-approved treatment for chronic obstructive pulmonary disease (COPD), to its portfolio.
Earlier this year, Merck broke ground on a new $1 billion plant in Delaware that would manufacture biologic drugs and a new, easier-to-use version of its cancer drug Keytruda.
Merck on Tuesday reported total worldwide sales in Q2 of 2025 at $15.8 billion, a decrease of 2% from the second quarter of 2024. The company’s HPV vaccine Gardasil led the decline, as its sales slipped 55% to $1.13 billion due to lower demand in China. Sales of Keytruda increased 9% to $8 billion. Animal health sales were $1.6 billion, an increase of 11%.
The company narrowed its 2025 expected worldwide sales range to be between $64.3 billion and $65.3 billion. It had previously modeled sales in a range of $64.1 billion to $65.6 billion.
