Novartis jobs go in savings drive

Generic versions of three Novartis drugs have been launched

Swiss drugs firm Novartis is to shed 2,500 jobs from its global workforce as part of a plan aimed at making annual savings of $1.6bn (£782m) by 2010.

Novartis, which employs 100,000 people worldwide, says it needs to combat price pressures, higher costs, tighter regulations and generic competition.

It said the measures would see it incur a $450m charge in the fourth quarter.

The move comes after Novartis said in October it was to cut 1,260 jobs in the US to generate annual savings of $230m.

'Tough situation'

Novartis has seen sales hit after its bowel drug Zelnorm was withdrawn in the US in March, and three of its medicines have faced competition from new generic versions.

Diabetes drug Galvus has also been delayed because of safety concerns.

The company's shares have fallen about 8% so far this year.

"It just shows investors again that the industry is in a very tough situation and that cost savings are required, but not necessarily the answer to all problems," said Denise Anderson, an analyst at Landsbanki Kepler.