Merck Launches $3 Billion Global Cost-Cutting Plan

Merck & Co. has initiated a major cost-cutting program that will save $3 billion by 2027. The multiyear program of optimization, outlined in its Q2 2025 earnings announcement, aims to improve productivity and redirect the savings to new product launches and a robust R&D pipeline.

As part of the program, Merck in July 2025 approved a restructuring plan that involves the elimination of certain administrative, sales, and R&D positions. The firm will continue to hire for strategic opportunities in growth initiatives, though. Furthermore, Merck aims to streamline its global real estate footprint and its manufacturing network to match business requirements and customer bases.

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The restructuring program is anticipated to bring in $1.7 billion of cost savings annually, mainly by the end of 2027. Merck has estimated the total pretax cost of the program at about $3 billion, for which $649 million has already been recorded for Q2 2025.

Even with the cost savings, Merck is doubling down on U.S. production and research and development outlays. It started construction on a $1 billion, 470,000-square-foot Biologics Center of Excellence in Wilmington, Delaware, that will also serve as the launch and commercial headquarters for KEYTRUDA and other biologics. It also started construction on an $895 million expansion of its Animal Health site in De Soto, Kansas, to increase production of vaccines and biologics.

Merck underscored the fact that the program harmonizes operational effectiveness with ongoing innovation, pinpointing its long-term focus on scientific progress and global health.