Eli Lilly to cut 3,500 jobs, focus on developing new medicines

Frederick Florina | AFP | Getty Images

An employee works in an unit dedicated to the production of insulin pens at the factory of the US pharmaceutical company Eli Lilly in Fegersheim, eastern France.

Eli Lilly said on Thursday it would lay off about 8 percent of its employees as the drugmaker, which delayed development of a potential blockbuster rheumatoid arthritis drug earlier this year, works to cut costs.

Lilly said it would cut about 3,500 positions around the world, resulting in yearly savings of about $500 million, beginning in 2018.

It expects that most of the cuts will come from a voluntary early retirement program it is offering in the United States. It also is closing a plant in Iowa and research and development offices in New Jersey and China.

Lilly expects charges of about $1.2 billion pretax or $0.80 per share after tax.

Shares of Lilly rose 41 cents, or 0.5 percent, to $80.92.