Pfizer policy change encouraging for startups

ANN ARBOR -- Pfizer Inc. may be calling back some of the workers it laid off just a few weeks ago. The company recently altered a major condition of its severance agreements with its former workers, a move that could open the door to rehire some employees whose jobs were eliminated this spring after the drugmaker's $57 billion purchase of Pharmacia Corp. In its merger-related severance packages with laid-off staffers, Pfizer barred departing workers from returning either as employees or contractors for at least two years. But in a switch announced to workers late last month, Pfizer management has dropped that policy in favor of a formula that will make former workers eligible to return much sooner. The shift in policy does not mean Pfizer will be hiring back the former employees. But it does shorten the length of time that ex-staffers have to wait before applying to rejoin the company. "What we discovered over time was, as the company changes and grows, there may be cases where we once again need people with those skills," said Rick Chambers, a spokesman for Pfizer in Michigan. "Likewise, we heard that some people who might be displaced wanted the opportunity to seek rehiring sooner (rather) than later." Kalamazoo city officials estimated that Pfizer has eliminated the jobs of more than 1,000 of the 6,300 employees at the former Pharmacia operations there. The company has never released the exact number of layoffs or transfers stemming from the merger. In Ann Arbor, Pfizer eliminated at least 200 of its roughly 3,000 jobs, mostly among the ranks in information technology, administration, human resources and finance. The new method to determine when a worker may qualify to return is based on the duration of severance pay. If employees have 27 weeks of severance pay, for example, they could apply to work 27 weeks after their termination date, Pfizer noted in a memo to staffers. The policy change is for U.S. Pfizer workers. Chambers said the rationale behind the original two-year separation program was to ensure any layoffs were targeted and focused. "The initial policy was put in place to make sure any decisions to let someone go were made with plenty of forethought," he said. Chambers said the change allows the company more flexibility. The reworked policy is not an acknowledgment that Pfizer was hasty in its layoffs, he said. It's too soon for any laid-off workers to return to work, regardless of their tenure with the company. The minimum employee severance package contained 23 weeks of pay, Chambers said. That means the earliest an eliminated employee could be eligible to reenter the company would be early next year. Gretchen Spreitzer, a clinical professor of organizational behavior at the University of Michigan Business School, said she's never heard of a two-year separation policy like the one Pfizer instituted. She also suspects there's more to the policy than the company's stated concern that any layoffs are well considered before they're ordered. "That's an interesting logic," Spreitzer said. "There might have been some fears that other parts of the organization would try and pick these people up." Spreitzer said companies that institute large layoffs often quickly realize they've lost important skills and institutional knowledge that could diminish a competitive edge. "One of the big trends we tend to see when companies merge is they cut not only the fat, but also the muscle of the organization," Spreitzer said. Meanwhile, last week the state approved $2 million in funding for life-sciences firms, including several looking to hire former Pfizer workers and perhaps do business with the company. The 11 funded projects were submitted by new and expanding companies in the areas of biotechnology, genetics and pharmaceuticals. "Many of these companies are relying on some sort of contract work with Pfizer in order to be profitable," said Jennifer Owens, spokeswoman for the Michigan Economic Development Corp., a state agency. "We definitely view (Pfizer's) policy change as a very favorable sign to allow these companies to move forward."