Merck Announces $3 Billion Cost-Cutting and Restructuring Plan

Merck announced a restructuring plan to achieve $3 billion in cost savings by the end of 2027, revealed with its Q2 2025 results.13

The program will involve layoffs affecting administrative, sales, and R&D positions, though Merck will continue hiring in strategic growth areas.13

Merck also plans to reduce its global real estate portfolio as it optimizes its manufacturing network to better align with customer locations.13

The restructuring will cost about $3 billion to implement and aims to redirect resources from mature business segments to newer growth drivers.3

The company expects approximately $1.7 billion in annual cost savings as a result of the restructuring.1

Despite cost-cutting, Merck remains committed to long-term domestic R&D and manufacturing investments, exemplified by recent biotechnology and animal health facility expansions.1

Merck's stock dropped nearly 7% following the announcement, marking its worst one-day performance in six months, partly due to a rare quarterly revenue miss.3

Sources:

1. https://njbiz.com/merck-3b-cost-cutting-job-reduction-restructuring-2025/

3. https://www.morningstar.com/news/marketwatch/2025072990/merck-will-lay-off-employees-and-shed-some-real-estate-to-cut-3-billion-in-costs