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ASTRAZENECA has announced today that is cutting 7,300 jobs as part of restructuring measures to “improve productivity”.

Around 2,200 of the job losses will be in the R&D division, while 1,350 will be lost from operations and 3,750 from the selling, general and administrative division. The announcement was made as part of the AstraZeneca’s full year results for 2011, which revealed that its core operating profits dropped by 4%. The company lost US$2b in revenue from generic competition and US$1b from government price interventions – many governments across the world are reducing the prices of drugs in a bit to cut healthcare costs and save money.

AstraZeneca employs around 61,000 staff and since 2007 has undertaken two previous restructuring efforts, cutting 12,600 jobs from 2007-2010 and a further 9,000 in a second phase from 2010-2011. The company says the third phase of cuts will deliver US$1.66b in annual benefits by 2014.

Exactly where the cuts will occur is not yet clear, although the company admits it will significantly cut back its efforts in neuroscience research. It says that while there is still a great need for new drugs, success has been “elusive” and it will instead create a small “virtual neuroscience unit” with 40-50 staff based at Cambridge, UK, and Boston, US, which will collaborate with the Karolinska Institute in Sweden. This will result in job losses at AstraZeneca’s two main neuroscience sites in Södertälje, Sweden and Montreal, Canada. The latter site will close completely.

AstraZeneca says this third restructuring phase will “reduce costs and increase flexibility in all functional areas, whilst continuing to drive innovation and externalisation of the R&D portfolio to create future value.” The company will also buy back US$4.5b of shares and has warned on future profits. In 2012 it expects to face continuing generic competition which will further impact on revenue. It will lose global patents on antipsychotic drug Seroquel IR and blood pressure drug Atacand, as well as its Canadian patent on cholesterol drug Crestor.

“While the further expected losses of market exclusivity make for a challenging 2012 outlook, we remain committed to a long-term, focused, R&D-based strategy, and today we have announced further steps to drive productivity in all areas to improve returns on our investment in innovation,” said CEO David Brennan.

AstraZeneca says that it has 86 projects in its R&D pipeline, with 79 in clinical development and seven drugs approved or launched. It also has nine new molecular entity (NME) projects in late stage development.