Merck & Co has unveiled plans to cut some 8,500 jobs, on top of a previously-announced reduction of 7,500 posts, in a bid to reduce costs and improve competitiveness.

The company expects to realise $2.50 billion in annual cost savings by the end of 2015 and the substantial majority of those will come from marketing and administrative expenses and R&D. The two staff reductions combined will result in a decrease of about 20% in Merck’s total global workforce of 81,000 employees and the new restructuring will cost between $2.50-$3.00 billion.

The company says it is "adopting a significantly streamlined and more flexible cost structure and operating model in response to business challenges and the rapidly changing external environment". Merck is going to focus on diabetes, acute hospital care, vaccines and oncology and is creating a "new, integrated unit" to prepare for a successful launch of MK-3475, its investigational anti-PD-1 immunotherapy for a broad range of cancer types.

As well as MK-3475, Merck is concentrating efforts on BACE for Alzheimer’s disease (MK-8931), its next generation hepatitis C programme and V503, the company’s nine-valent HPV vaccine. Geographically, Merck says it will increase its focus in "ten prioritised markets", namely the USA, Japan, France, Germany, Canada, the UK, China, Brazil, Russia and Korea.

The company added that it will "out-license or discontinue selected late-stage clinical development assets and reduce its focus on platform technologies". It will also make "externally-sourced programmes a greater component of its pipeline strategy".

Finally, having announced a year ago that it would move its global headquarters from Whitehouse Station to another site in New Jersey, Summit, Merck has now decided to close both of these and move everything to its campus in Kenilworth, also in New Jersey.