Pfizer outsourcing some R&D IT work
Pfizer Inc. will give two companies in India some of the information technology work for its research and development teams as part of its $4 billion cost-savings plan, according to a company memo circulated this week.
The memo, titled "Evaluating Options: Moving IT Services to Low Cost Locations," says the outsourcing would be done at a "carefully planned pace." The internal document was obtained by The Day newspaper of New London, Conn.
The outsourcing won't affect current Pfizer employment, a spokeswoman said.
Pfizer has a plant in Lincoln that makes animal health products and does research.
"Pfizer Global R&D relies extensively on outside contractors to provide IT services and we have done so for many years," spokeswoman Liz Power wrote in an email to the Journal Star. "In reviewing our sourcing strategy, we expect to increase our use of contractors in lower-cost markets such as India where we have worked with IT vendors for the past 10 years. This review will impact our IT sourcing strategy, not current Pfizer jobs."
Infosys Technologies Ltd. and Satyam Computer Services Ltd. of India would partner with Pfizer and provide some of the computer and technology-related services, the memo said.
Pfizer would join other large corporations that are sending information technology jobs to a growing number of firms in India, China and other countries.
Pfizer officials otherwise declined to comment on the document, calling it internal correspondence with its worldwide research and development associates.
The memo, sent to workers by e-mail on Monday, did not specify how much money the company would save by outsourcing the work.
Pfizer, based in New York, has about 6,000 employees at its worldwide research and development facilities in New London and Groton, Conn.
Pfizer announced in April that it planned to cut $4 billion in costs by 2008, with the goal of boosting sagging stock prices. The cuts would represent about a 12 percent decrease in global expenses, based on 2005 figures.
No consequences of that plan for Lincoln employment or operations have been disclosed.
Industry analysts believe the cost-cutting could include job reductions and plant closings.
In another development, Pfizer said its board authorized the repurchase of up to $5 billion of its common shares and also reported plans to repatriate an added $8.6 billion in foreign earnings beyond the initial $28.3 billion it previously announced.
Pfizer recently completed a previous $5 billion repurchase plan.
The company also said it will take a tax charge of about $365 million, or 5 cents per share, in the second quarter in connection with the added repatriation.
Pfizer also will record a reversal of at least $850 million of the $2.19 billion tax charge recorded in the first quarter in connection with the original $28.3 billion repatriation, mainly as a result of recent guidance issued by the U.S. Treasury.
Several pharmaceutical companies have taken advantage of the American Jobs Creation Act passed by Congress last year. It allows companies to repatriate retained earnings from their overseas operations at a greatly reduced tax rate.
The memo, titled "Evaluating Options: Moving IT Services to Low Cost Locations," says the outsourcing would be done at a "carefully planned pace." The internal document was obtained by The Day newspaper of New London, Conn.
The outsourcing won't affect current Pfizer employment, a spokeswoman said.
Pfizer has a plant in Lincoln that makes animal health products and does research.
"Pfizer Global R&D relies extensively on outside contractors to provide IT services and we have done so for many years," spokeswoman Liz Power wrote in an email to the Journal Star. "In reviewing our sourcing strategy, we expect to increase our use of contractors in lower-cost markets such as India where we have worked with IT vendors for the past 10 years. This review will impact our IT sourcing strategy, not current Pfizer jobs."
Infosys Technologies Ltd. and Satyam Computer Services Ltd. of India would partner with Pfizer and provide some of the computer and technology-related services, the memo said.
Pfizer would join other large corporations that are sending information technology jobs to a growing number of firms in India, China and other countries.
Pfizer officials otherwise declined to comment on the document, calling it internal correspondence with its worldwide research and development associates.
The memo, sent to workers by e-mail on Monday, did not specify how much money the company would save by outsourcing the work.
Pfizer, based in New York, has about 6,000 employees at its worldwide research and development facilities in New London and Groton, Conn.
Pfizer announced in April that it planned to cut $4 billion in costs by 2008, with the goal of boosting sagging stock prices. The cuts would represent about a 12 percent decrease in global expenses, based on 2005 figures.
No consequences of that plan for Lincoln employment or operations have been disclosed.
Industry analysts believe the cost-cutting could include job reductions and plant closings.
In another development, Pfizer said its board authorized the repurchase of up to $5 billion of its common shares and also reported plans to repatriate an added $8.6 billion in foreign earnings beyond the initial $28.3 billion it previously announced.
Pfizer recently completed a previous $5 billion repurchase plan.
The company also said it will take a tax charge of about $365 million, or 5 cents per share, in the second quarter in connection with the added repatriation.
Pfizer also will record a reversal of at least $850 million of the $2.19 billion tax charge recorded in the first quarter in connection with the original $28.3 billion repatriation, mainly as a result of recent guidance issued by the U.S. Treasury.
Several pharmaceutical companies have taken advantage of the American Jobs Creation Act passed by Congress last year. It allows companies to repatriate retained earnings from their overseas operations at a greatly reduced tax rate.
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