Swiss contract manufacturer Lonza has announced major job cuts as a result of less business from its pharmaceutical clients.

The Basel-based group announced at the end of last year that it needed to “adjust the organisation to the more volatile market environment” and reduce fixed costs in the range of 60-80 million Swiss francs in the next 18-24 months. It now says that to help achieve this, it is closing three sites – Conshohocken (USA), Shawinigan (Canada) and Wokingham (UK) in 2010.

The closures will affect 175 employees and restructuring costs will be in the region of 140 million francs, of which 75% relates to restructuring activities in small molecules. The company said that “the economic pressures of the past 18 months have clearly accelerated the cost reduction efforts of the pharmaceutical industry” and “in response to that Lonza is strengthening its platform in Asia”.

Chief executive Stefan Borgas said the closure of the three sites “will help to optimize our global operational network and further increase the competitiveness for our customers”. He added that “the re-engineering project is a key element in our endeavour to bring Lonza back to a sustainable growth”.

Observers see the restructuring as a significant move, and Carla Baenziger, an analyst at Vontobel, said that the closure of the Riverside site in particular, “shows that Lonza is feeling the first signs of the upcoming patent cliff in the small molecule market”.