Here's the link to the article: http://www.fin24.com/Companies/Health/Merck-to-cut-8-500-more-jobs-20131001
This article is about the plan of a US pharmacy company, Merck to cut 8,500 more workers after it had already laid off 7,500 worker few months ago. The company aimed to cut costs by $2.5 billion by the end of year 2015 and it expected to achieve 40 percent of targeted savings ( about USD$ 1 billion) at the end of this year 2014 , therefore the first thing that they decided to do is to cut off the labour which is a variable cost.
"These actions will make Merck a more competitive company, better positioned to drive innovation and to more effectively commercialize medicines and vaccines for the people who need them," said Kenneth Frazier, Merck chairman and chief executive, in the statement
The chairman and chief executive said that this decision of cutting down more workers would be the best decision for the company to become more competitive. Not only improving in the short term, the company has looked forward to the long term improvements which include benefit of customers and shareholders as well. Here, it refers back to the idea that companies play a role as cost minimisers and profit maximisers ! because, we all can see from this article that the company laid off a lot of labours which is considered as the cut of costs, in order to make more benefit to the shareholders. And after this early action, the share went up by 2.2 percent at $48.56.
So conclusion is that the company tried to cut down the total cost of producing in the short run to seek for a better profit!
This article is about the plan of a US pharmacy company, Merck to cut 8,500 more workers after it had already laid off 7,500 worker few months ago. The company aimed to cut costs by $2.5 billion by the end of year 2015 and it expected to achieve 40 percent of targeted savings ( about USD$ 1 billion) at the end of this year 2014 , therefore the first thing that they decided to do is to cut off the labour which is a variable cost.
"These actions will make Merck a more competitive company, better positioned to drive innovation and to more effectively commercialize medicines and vaccines for the people who need them," said Kenneth Frazier, Merck chairman and chief executive, in the statement
The chairman and chief executive said that this decision of cutting down more workers would be the best decision for the company to become more competitive. Not only improving in the short term, the company has looked forward to the long term improvements which include benefit of customers and shareholders as well. Here, it refers back to the idea that companies play a role as cost minimisers and profit maximisers ! because, we all can see from this article that the company laid off a lot of labours which is considered as the cut of costs, in order to make more benefit to the shareholders. And after this early action, the share went up by 2.2 percent at $48.56.
So conclusion is that the company tried to cut down the total cost of producing in the short run to seek for a better profit!