The Swiss specialty chemicals group, Lonza, says it will axe 500 jobs - 90 of them in Switzerland - in response to deteriorating market conditions.
The announcement came as the Basel-based firm cut its 2003 earnings outlook by 20 per cent.
"The group has begun to implement measures to improve efficiency and reduce overhead costs," Lonza said in a statement on Monday.
"Approximately 500 jobs, mainly in the United States and Europe, will be affected," it added.
Shares in the chemical group dropped more than ten per cent in early morning trading to SFr72.60 ($56.17).
Analysts said the announcement came as no surprise. "However, it's very negative news, especially because its flagship biochemistry business is affected," Martin Vögtli, an analyst at Bank Vontobel, told swissinfo.
Lonza said it did not expect its 2003 profit would beat 2002 levels, which came in at SFr221 million ($171.26) before exceptional items - a drop of 45 per cent on the previous year.
It added that first-half operating profit would drop around 20 per cent below last year's levels.
The firm said its exclusive synthesis business, which provides custom-made chemical products, continued to suffer from overcapacity amid a dearth of new drug launches.
However, Lonza hopes the restructuring measures will cut costs by SFr100 million ($77.38 million) and boost its second-half figures.
Exactly one year ago, the life sciences company chose the canton Valais town of Visp as the location for its new biopharmaceuticals plant. Its offices there were extended to make way for approximately 100 additional jobs.
However, the 2,800 employees at Visp are set to be most affected by the job cuts, Lonza said.
The Basel office, which has a staff of 220 people, will see fewer jobs go.
Lonza employs 6,200 people in eight countries and recorded 2002 sales of SFr2.54 billion.
The firm manufactures and supplies active chemical ingredients to the pharmaceutical and agrochemical industries.
swissinfo with agencies
Lonza employs 6,200 people in eight countries.
Europe and the US will be hardest hit by the job cuts.
Lonza hopes the measures will cut costs and improve its balance sheet.
Shares in Lonza fell more than ten per cent in early morning trading to SFr72.60.