Thursday, July 31, 2014

I love corporate America, part 731

I'm saddened to learn of layoffs at Amgen; I'm rather ironically amused to learn that cuts have a name from a comment by Chrispy at In The Pipeline (emphasis mine):
The current trend of gutting internal R&D with the hope in in-licensing Phase II molecules is not a model for long-term success. Without researchers you will not even understand what you are buying. But maybe it doesn't matter if you don't listen to them, anyway (e.g., Sirtris). 
The nutty thing from the inside is that this particular layoff was branded "Amgen Full Potential" as if the laid-off folk were the problem. No, guys, less is less, and full potential moving forward is less than it could have been without this exercise. 
You know, great plans always have a name, kind of like "Adapting to Scale", "Let a Hundred Flowers Bloom" or "The Great Leap Forward".  Good on you, Amgen bosses, for keeping the trend alive.

In all seriousness, something from that FierceBiotech story is bothersome to me (again, emphasis mine):
Amgen ($AMGN) reported Tuesday evening that it plans to ax up to 15% of the company's workforce, shutting down all of its facilities in Colorado and Washington state as it slashes up to 2,900 staffers. 
Big research and manufacturing sites in Seattle and Bothell, WA, and Boulder and Longmont, CO, are all on the chopping block, including the sprawling 750,000-square-foot Helix research campus in Seattle with 610 staffers. And while it plans to keep its headquarters in Thousand Oaks, CA, the Big Biotech says it will consolidate a smaller headcount among fewer buildings, shrinking its corporate footprint. 
Derek Lowe notes that the Boston and San Francisco Amgen sites will actually add headcount.

Seems to me that many economic development commissions for larger municipalities will always tout the possibility of their area becoming its own biotech hub. When I hear those claims, I always think about the Seattle area, how it is so close to national status and seems to have never quite gotten there, thanks to blows like this one. And then I ask, local government people, what are you going to do that Seattle hasn't? 

15 comments:

  1. Well, I assume that municipalities and states just will have to bribe (errrr...incentivize) harder and tax individuals more to make up lower corporate and corporate property taxes if they want those big businesses. C'mon, guys, you can do it!

    I assume the "part 731" is by accident (or by a bumper crop of reasons to love big business behavior) and not a reference to Unit 731 (mission statement: "bringing diseases and death to the (non-Japanese) masses, again"?)

    ReplyDelete
    Replies
    1. Heh. No, it was a random typing. I should really just start using Random.org instead of pretending like my fingers can type pseudo-random numbers.

      Delete
  2. I suppose calling it the "Amgen Death March" would be over-dramatic? :-(

    ReplyDelete
  3. Come on you should know the priorities by now with the observed Stock price increase and Market Analysts praises of such moves to down grade R&D. Everyone wants the immediate rewards while assuming no risks, especially when takes so long to get results. Amgen is simply another example of Wall Street leadership take the money and run approach.

    ReplyDelete
    Replies
    1. Market analysts that would make Pavlov proud.

      Delete
  4. I think all of these should be named Operation Sodom and/or Gomorrah.

    ReplyDelete
    Replies
    1. Operation Nerdhammer.

      Delete
  5. Unstable IsotopeJuly 31, 2014 at 6:59 PM

    I heard on the radio on my way home that investors are worried because job growth is picking up and wages may rise. Oh no not that!

    ReplyDelete
    Replies
    1. Yeah, but they're happy because they can raise prices. (USA Today) They've claimed they're not losing business, so there must be someone with lots of money out there, right?

      They'll have to take comfort in that because of the plethora of crappy jobs, the wage increases will be a lot smaller. They need to look on the bright side.

      Delete
  6. "And then I ask, local government people, what are you going to do that Seattle hasn't? "

    You can't win a race to the bottom. There is no end-game when it comes to job-poaching via regulatory and tax arbitrage other than bankrupted state and local governments, and near complete deregulation. The feds should step in and prevent local governments from shooting each other in the face.

    ReplyDelete
    Replies
    1. Whatever, dude, our Buttcheekville 2020 plan has us using a Barrett. Our face hole is going to be much, much bigger than Fannytown's.

      Delete
    2. I think that bankrupted state and local governments may be a feature of the process, not a bug - you'll get the government you can pay for (and if you can't pay, you can figure out what happens). It also helps to get rid of unions, since their main strongholds are in government now and bankruptcy allows cities and states to free themselves of all their pesky promises.

      Someone always wins a race to the bottom - it's just not local governments or their citizens, or the people working at the new company.

      Delete
    3. You see this even on a global scale- all those 'inversions.' It doesn't help that US corporate taxes are based on where a company is headquartered vs where it does business like in other countries. Look at how Apple takes advantage of that by headquartering a subsidiary in Ireland. Or the way Abbvie bought Shire. Or Pfized tried to buy Az. Taxes should be a reflection of the quality and quantity of government services. If companies want services they should ante up. If they don't they should conduct their business in Yemen or Somalia. Something needs to be done to limit the ability of corporations to take advantage of government services without paying taxes commensurate with those services.

      Delete
    4. companies dont pay taxes, people pay taxes.

      Delete
  7. Seattle sunk a huge amount of taxpayer $ into sweet deals for that facility to entice Amgen.... damn sad.

    ReplyDelete