Lilly to reorganize and cut 5,500 jobs

INDIANAPOLIS (WISH) - Big changes are coming to Eli Lilly and Company.

The Indianapolis-based pharmaceutical company announced Monday morning it plans to cut $1 billion dollars in expenses including 5,500 jobs.

It's still unclear where those cuts will come, but Lilly spokesperson Bart Peterson told 24-Hour News 8 that since Indiana has more of the company's employees than any other single location, it will most likely feel the biggest impact.

The company employs nearly 12,000 people in Indianapolis.

"Each step along the way will have answers to some of these questions about where the employment impacts will be, where some of the reductions will occur," Peterson said. "We don't know those answers just yet, but we'll let you know right after we let our employees know."

The move comes as part of a redesign Lilly is planning to implement over the next few years. The company plans to create four new business units for its pharmaceutical operation.

It also plans to establish what it will call a Development Center of Excellence to speed up creation of new medicines.

"So this redesign is about one thing and one thing only, and that is getting innovative new medicines to people to help enhance their lives," Peterson said. "That's what everybody at this company gets up and works on every single day. It's a real mission."

Inside Indiana Business Managing Editor Gerry Dick told 24-Hour News 8 he is not surprised by the Lilly move.

"If you have been listening to CEO John Lechleiter and others at Lilly for some time, they've said, 'We are going to be smaller.' They've reduced headcount over the past several years, and they're going to reduce it more. This is really the realization in a big way of a strategic vision that says, 'We're going to face some real challenges in the next couple of years; this is how we're going to deal with it."

Lilly said it plans to complete the cost cutting and job reductions by the end of 2011.