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Merck to Axe Jobs As Part of New Research Focus

July 13, 2016, 7:22 PM UTC
The Powerful And Influential Attend Clinton Global Initiative Annual Meeting
NEW YORK, NY - SEPTEMBER 27: Kenneth Frazier the Chairman and CEO of the pharmaceutical company Merck & Co., is viewed on stage at the the annual Clinton Global Initiative (CGI) meeting on September 27, 2015 in New York City. The event, which coincides with the General Assembly at the United Nations, gathers global leaders, activists and business people to try and to bring solutions to the world's most pressing challenges. CGI Annual Meetings have brought together 190 sitting and former heads of state, more than 20 Nobel Prize laureates, and hundreds of leading CEOs, heads of foundations and NGOs, major philanthropists, and members of the media. The meeting was established in 2005 by President Bill Clinton. (Photo by Spencer Platt/Getty Images)
Photograph by Spencer Platt—via Getty Images

Merck (MRK) will be cutting research jobs in New Jersey and Pennsylvania as it builds new research hubs in Massachusetts and California, the company told its employees on Tuesday.

“We are not providing a breakdown of the changes or specific numbers of impacted employees at this time, but we anticipate that less than 10 percent of discovery, pre-clinical and early development colleagues will be impacted,” a spokesperson for the pharma giant confirmed in an statement emailed to Fortune. That means the layoffs from research sites in Kenilworth and Rahway, New Jersey and North Wales, Pennsylvania are likely to affect about 300 workers.

Merck CEO Ken Frazier has been on a mission to overhaul and streamline the company’s operations since he took the reins in 2011. In 2015, the drugmaker estimated that it had cut more than 36,000 jobs since 2010 as part of the massive restructuring effort, and the number has only grown since then.

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The latest round of layoffs highlights Merck’s desire to shift focus and invest in “exploratory biology,” according to the spokesperson. That includes expanding research into the human microbiome, micro-organisms like bacteria and fungi in the body, and how they may affect certain diseases and overall health. An increasing number of pharma companies are looking into how leveraging the microbiome, such as gut bacteria, can help treat a variety of conditions.

Merck said that it will build new laboratory sites in Cambridge, Massachusetts to focus on microbiomes, as well as a new consolidated hub in the San Francisco Bay area centered on major R&D areas such as cancer immunotherapy, cardiovascular, and metabolic diseases.

The days of the massive, wide-ranging biopharma R&D shop have been on a steady decline. Global giants like Pfizer (PFE), AstraZeneca, Amgen (AMGN), and many others have been downsizing their research departments to hone in on what they see as the most promising treatment areas.

Some of these companies also have used a strategy of acquiring or striking licensing deals with smaller, more specialized biopharma companies. For instance, Merck itself has teamed up with South Korea’s Samsung Bioepis to market new (and cheaper) copycat versions of some of the world’s best-selling drugs.