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Monday, July 18, 2011
Lilly’s Big Red Arrow of Doom: 7,500 Layoffs, $1B in Cuts to Come | BNET
John Lechleiter, became CEO of Lilly in April, 2008. In 2009 Lechleiter continued Lilly’s outsourcing policy and he terminated 5,500 employees and guess what? He received a compensation package valued at $16.4 million, a 54 percent increase from 2008. Leichleiter also received a salary as president and chairman, and this salary rose nearly 11 percent to $1.48 million and there is more, his performance-related cash bonus jumped 31 percent to $3.55 million. Since 2006 Lilly has been systematically reducing its workforce in America. In 2006, 20 percent of Lilly’s chemistry research and production work was done in China for one-quarter the U.S. cost and helped fund a startup lab, Shanghai's Chem-Explorer Co., with 230 chemists. Lilly also slashed the costs of clinical trials on human patients by shifting this work to Brazil, Russia, China, and India (Engardio, Arndt, and Foust, 2006). If is difficult to know exactly how many Lilly jobs have been lost, for example, some suggest that by the end of 2011 another 7,500 American jobs will go. Lilly is not alone, it is just as difficult to know how many jobs in the country are lost each month through outsourcing and offshoring. There is a solution and this is perhaps one area where quick action by the government can put a stop to this “bottom line” mentality. Every time a company lays off or terminates an employee a report must be filed with congress. Companies that terminate an excessive amount of employees like Lilly must appear in front of a commission and explain the motivations for such actions. This would provide scholars with a lot of data and it would most likely stop this foolishness that is destroying America.
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John Lechleiter, became CEO of Lilly in April, 2008. In 2009 Lechleiter continued Lilly’s outsourcing policy and he terminated 5,500 employees and guess what? He received a compensation package valued at $16.4 million, a 54 percent increase from 2008. Leichleiter also received a salary as president and chairman, and this salary rose nearly 11 percent to $1.48 million and there is more, his performance-related cash bonus jumped 31 percent to $3.55 million. Since 2006 Lilly has been systematically reducing its workforce in America. In 2006, 20 percent of Lilly’s chemistry research and production work was done in China for one-quarter the U.S. cost and helped fund a startup lab, Shanghai's Chem-Explorer Co., with 230 chemists. Lilly also slashed the costs of clinical trials on human patients by shifting this work to Brazil, Russia, China, and India (Engardio, Arndt, and Foust, 2006). If is difficult to know exactly how many Lilly jobs have been lost, for example, some suggest that by the end of 2011 another 7,500 American jobs will go. Lilly is not alone, it is just as difficult to know how many jobs in the country are lost each month through outsourcing and offshoring. There is a solution and this is perhaps one area where quick action by the government can put a stop to this “bottom line” mentality. Every time a company lays off or terminates an employee a report must be filed with congress. Companies that terminate an excessive amount of employees like Lilly must appear in front of a commission and explain the motivations for such actions. This would provide scholars with a lot of data and it would most likely stop this foolishness that is destroying America.
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