Pfizer struggles to claw back faith with Wall Street and its employees as it recovers from the Covid decline

by | Jun 28, 2024 | Business

In this articlePFEFollow your favorite stocksCREATE FREE ACCOUNTKena Betancur | Corbis News | Getty ImagesPfizer had a “phenomenal” first quarter — and Wall Street took notice, CEO Albert Bourla told thousands of employees during a companywide town hall on May 2, according to a recording heard by CNBC. A day earlier, the pharmaceutical giant’s stock had closed 6% higher after its quarterly results topped analyst estimates and it hiked its full-year outlook. It was a far cry from the year prior, when Pfizer’s shares plunged more than 40%, making it one of the worst-performing large pharmaceutical stocks of 2023. Its market cap of about $157 billion is now less than half of its 2021 peak of nearly $350 billion.  Few companies benefited from the pandemic as much as Pfizer did. The drugmaker’s profits boomed, fueled by its Covid vaccine and antiviral pill Paxlovid. After Pfizer and German company BioNTech rapidly developed and deployed a lifesaving shot that helped the world emerge from the pandemic, Pfizer drew widespread praise.Pfizer’s success contributed to its equally jarring fall from grace. When the virus receded in 2023, its Covid products revenue plummeted. The world, which hailed Pfizer as a pandemic hero a few years earlier, no longer needed the company in the same way.Pfizer may be on its way toward stabilizing its business and winning back Wall Street’s favor after the strong first quarter. But the company is struggling to balance that with the fears of its employees, some of whom said they feel uncertain about their future and unmotivated after the sudden reversal of fortune.In October Pfizer launched a multibillion-dollar cost-cutting program, slashing research and development spending and laying off hundreds of employees — including in the once-lauded Covid vaccine unit. In May the company said it’s on track to deliver $4 billion in savings by the end of the year. [embedded content]Pfizer’s stock surged after it rolled out its Covid vaccine and antiviral treatment, then plunged when the company’s Covid revenue started to drop.Now, as Pfizer appears poised to turn a corner, the company is trying to boost employee morale to match Wall Street’s optimism. CNBC spoke with 11 current and former Pfizer employees — all of whom asked to remain anonymous for fear of retaliation — about Pfizer’s dizzying climb, rapid decline and turnaround strategy.The company’s seesawing fortunes have fueled uncertainty within Pfizer’s workforce. Most of the current and former employees CNBC spoke with called Pfizer a good place to work, and some current employees said they feel optimistic about the direction of the company after the first quarter.But other current employees are dissatisfied with where the strategy shift has left them. Some cited higher workloads after teams were stretched thin by budget cuts, a return-to-office policy they said has forced out some remote workers, and doubts about how the business will perform moving forward.The company’s separate multiyear cost-cutting program announced in May is also stoking fears about the potential for new U.S. layoffs, according to some current workers. Some employees working in certain manufacturing and supply chain divisions, which they believe are likely to be affected by the cuts, described having low morale and motivation to work.Meanwhile, several former Pfizer employees, most of whom were laid off over the last six months or left voluntarily, said they’re unhappy with how the company handled cost cuts in 2023. Some alleged that Pfizer management provided little transparency around the layoffs and seemed more focused on the company’s stock performance than its staff throughout the process.During the latest town hall, Bourla told employees that layoffs in the U.S. have been completed but that more are occurring internationally. He called the job cuts “very, very painful” and said it was “killing” him to let employees go. But he also acknowledged that Wall Street likes the cuts. “And, of course, I’m very concerned with everyone that could be affected and impacted by that, but it works,” Bourla said, according to the recording. “And we saw it, how the Street will respond.”A Pfizer spokesperson said reducing costs will “put us on strong footing towards margin expansion and improved financial returns moving forward.”The spokesperson added that cutting expenses is one of Pfizer’s five priorities for the year, along with maximizing the performance of new products, innovating its drug pipeline, growing its oncology business with its acquisition of cancer drugmaker Seagen, and allocating capital to increase its dividend, reduce outstanding debt and reinvest in the business.To cut costs, apart from layoffs the compa …

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[mwai_chat context=”Let’s have a discussion about this article:nnIn this articlePFEFollow your favorite stocksCREATE FREE ACCOUNTKena Betancur | Corbis News | Getty ImagesPfizer had a “phenomenal” first quarter — and Wall Street took notice, CEO Albert Bourla told thousands of employees during a companywide town hall on May 2, according to a recording heard by CNBC. A day earlier, the pharmaceutical giant’s stock had closed 6% higher after its quarterly results topped analyst estimates and it hiked its full-year outlook. It was a far cry from the year prior, when Pfizer’s shares plunged more than 40%, making it one of the worst-performing large pharmaceutical stocks of 2023. Its market cap of about $157 billion is now less than half of its 2021 peak of nearly $350 billion.  Few companies benefited from the pandemic as much as Pfizer did. The drugmaker’s profits boomed, fueled by its Covid vaccine and antiviral pill Paxlovid. After Pfizer and German company BioNTech rapidly developed and deployed a lifesaving shot that helped the world emerge from the pandemic, Pfizer drew widespread praise.Pfizer’s success contributed to its equally jarring fall from grace. When the virus receded in 2023, its Covid products revenue plummeted. The world, which hailed Pfizer as a pandemic hero a few years earlier, no longer needed the company in the same way.Pfizer may be on its way toward stabilizing its business and winning back Wall Street’s favor after the strong first quarter. But the company is struggling to balance that with the fears of its employees, some of whom said they feel uncertain about their future and unmotivated after the sudden reversal of fortune.In October Pfizer launched a multibillion-dollar cost-cutting program, slashing research and development spending and laying off hundreds of employees — including in the once-lauded Covid vaccine unit. In May the company said it’s on track to deliver $4 billion in savings by the end of the year. [embedded content]Pfizer’s stock surged after it rolled out its Covid vaccine and antiviral treatment, then plunged when the company’s Covid revenue started to drop.Now, as Pfizer appears poised to turn a corner, the company is trying to boost employee morale to match Wall Street’s optimism. CNBC spoke with 11 current and former Pfizer employees — all of whom asked to remain anonymous for fear of retaliation — about Pfizer’s dizzying climb, rapid decline and turnaround strategy.The company’s seesawing fortunes have fueled uncertainty within Pfizer’s workforce. Most of the current and former employees CNBC spoke with called Pfizer a good place to work, and some current employees said they feel optimistic about the direction of the company after the first quarter.But other current employees are dissatisfied with where the strategy shift has left them. Some cited higher workloads after teams were stretched thin by budget cuts, a return-to-office policy they said has forced out some remote workers, and doubts about how the business will perform moving forward.The company’s separate multiyear cost-cutting program announced in May is also stoking fears about the potential for new U.S. layoffs, according to some current workers. Some employees working in certain manufacturing and supply chain divisions, which they believe are likely to be affected by the cuts, described having low morale and motivation to work.Meanwhile, several former Pfizer employees, most of whom were laid off over the last six months or left voluntarily, said they’re unhappy with how the company handled cost cuts in 2023. Some alleged that Pfizer management provided little transparency around the layoffs and seemed more focused on the company’s stock performance than its staff throughout the process.During the latest town hall, Bourla told employees that layoffs in the U.S. have been completed but that more are occurring internationally. He called the job cuts “very, very painful” and said it was “killing” him to let employees go. But he also acknowledged that Wall Street likes the cuts. “And, of course, I’m very concerned with everyone that could be affected and impacted by that, but it works,” Bourla said, according to the recording. “And we saw it, how the Street will respond.”A Pfizer spokesperson said reducing costs will “put us on strong footing towards margin expansion and improved financial returns moving forward.”The spokesperson added that cutting expenses is one of Pfizer’s five priorities for the year, along with maximizing the performance of new products, innovating its drug pipeline, growing its oncology business with its acquisition of cancer drugmaker Seagen, and allocating capital to increase its dividend, reduce outstanding debt and reinvest in the business.To cut costs, apart from layoffs the compa …nnDiscussion:nn” ai_name=”RocketNews AI: ” start_sentence=”Can I tell you more about this article?” text_input_placeholder=”Type ‘Yes'”]
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