Merck announces layoffs and restructuring

It is pretty obvious that Merck's legal troubles are driving it towards a path of financial ruin or even eventual bankruptcy. After the stock has been in a steep fall since the recall of Vioxx was announced, the company has struggled to find solid ground to stand on. In desperate measures since then, the company has responded by laying off the hapless employees of the company.

Not knowing what to do as it starts the federal trial, Merck has announced that it cutting an additional 7,000 jobs. In other words, one out of ten Merck employees is being let go. The company has also announced plans to close or sell five of its manufacturing plants as part of an up to $4 billion restructuring plan.

In the meantime analysts believe that when Judge Eldon Fallon allowed plaintiffs to present evidence that even rare or short-term use of Vioxx can be fatal, Merck will now have to fight each lawsuit or settle with them. In other words, the compay will be mired under Vioxx litigation for at least a decade.

Related article: Major setback to Merck in Vioxx trial