Merck & Co CEO Richard Clark, in a press release, stated the company will be entering further economic restructuring, laying off 6,800 employees and not filling another 400 vacancies. The cuts come on top of 10,400 jobs that were slashed in an earlier restructuring.

Partly is due to drop in sales of several of their products: third-quarter net profit fell 28 percent, and shares had fallen more than 3 percent.

"Our current sales trends for key products, compounded by known industry and emerging economic factors, have led us to reassess the environment in which we expect to be operating between now and 2010," CEO Richard Clark stated.

Merck withdrew its long-term forecast in July after setbacks for its Vytorin cholesterol drug – sold jointly with Schering-Plough - along with its earlier projections for double-digit increases in profit – Vytorin sales have been dropping, from first-quarter ($ 651 million), second-quarter ($ 592 million) to third-quarter ($ 567 million), for a total of $ 1.8 billion dollars worldwide for the first nine months of the year.

The global restructuring should result in cumulative savings of $ 3.8 billion to $ 4.2 billion dollars from 2008 to 2013, the company said.

Over the next two years, the market outlook was that Merck is going to lose further ground to generics, said Morningstar analyst Damien Conover, pointing out patent expiries of blood pressure drug Cozaar (almost $ 2.7 billion dollars in 3Q2008) and first-placed allergy drug Singulair (over $ 3.2 billion dollars total in 3Q2008).

Merck said it earned $ 1.09 billion dollars, or 51 cents per share, down from $ 1.53 billion dollars, or 70 cents per share, a year ago.

Vytorin troubles began after a study, called Enhance, questioned the effectiveness of the cholesterol treatment Vytorin. A second study unveiled soon afterward, called Seas, also cast doubt on Vytorin's effectiveness and suggested it might increase cancer risk.

Adverse publicity from the two studies have hurt sales of Vytorin and Zetia, a cholesterol drug that is a component of the Vytorin combination pill – Zetia’s cumulative sales for 3Q2008 were almost $ 1.7 billion dollars, but slowing: $ 581 million first-quarter; $ 560 million second-quarter; and $ 534 million in the third-quarter).

In another setback, Merck said it will have to delay the launch of its new medicine, Tredaptive, designed to raise good HDL cholesterol, in Europe and other markets due to a manufacturing-related issue. It has not yet been approved by the Food and Drug Administration (FDA).

Merck´s cervical cancer vaccine Gardasil saw sales fall 4 percent to $ 401 million dollars, while diabetes drug Januvia was a bright spot, with sales doubling to $ 379 million dollars for the third quarter.