Restructuring

6 Months Ended

Jun. 30, 2025

Restructuring and Related Activities [Abstract]

In July 2025, the Company approved a new restructuring program (2025 Restructuring Program) designed to position the Company for its next chapter of growth and to successfully advance its pipeline and launch new products across multiple therapeutic areas. As part of this program, the Company expects to eliminate certain positions in sales and administrative organizations, as well as research and development. The Company will, however, continue to hire employees into new roles across all strategic growth areas of the business. In addition, the Company will reduce its global real estate footprint and continue to optimize its manufacturing network, aligning the geography of its global manufacturing footprint to its customers and reflecting changes in the Company’s business. Most actions contemplated under the 2025 Restructuring Program are expected to be largely completed by the end of 2027, with the exception of certain manufacturing actions, which are expected to be substantially completed by the end of 2029. The cumulative pretax costs to be incurred by the Company to implement the program are estimated to be approximately $3.0 billion, of which approximately 60% will be cash, relating primarily to employee separation expense and contractual termination costs. The remainder of the costs will be non-cash, relating primarily to the accelerated depreciation of facilities. The Company recorded total pretax costs of $649 million in the second quarter of 2025 related to the 2025 Restructuring Program.

In January 2024, the Company approved a restructuring program (2024 Restructuring Program) intended to continue the optimization of the Company’s Human Health global manufacturing network as the future pipeline shifts to new modalities and also optimize the Animal Health global manufacturing network to improve supply reliability and increase efficiency. The actions contemplated under the 2024 Restructuring Program are expected to be substantially completed by the end of 2031, with the cumulative pretax costs to be incurred by the Company to implement the program estimated to be approximately $4.0 billion. Approximately 60% of the cumulative pretax costs will be non-cash, relating primarily to the accelerated depreciation of facilities to be closed or divested. The remainder of the costs will result in cash outlays, relating primarily to facility shut-down costs. The Company recorded total pretax costs of $130 million and $177 million in the second quarter of 2025 and 2024, respectively, and $235 million and $422 million in the first six months of 2025 and 2024, respectively, related to the 2024 Restructuring Program. Since inception of the 2024 Restructuring Program through June 30, 2025, Merck has incurred total cumulative pretax costs of $1.3 billion.

For segment reporting, restructuring charges are unallocated expenses.

The following tables summarize the charges related to restructuring program activities by type of cost:


	Three Months Ended June 30, 2025								Six Months Ended June 30, 2025
($ in millions)	Accelerated Depreciation		Separation Costs		Other Exit Costs		Total		Accelerated Depreciation		Separation Costs		Other Exit Costs		Total
2025 Restructuring Program
Cost of sales	$	—	$	—	$	100	$	100	$	—	$	—	$	100	$	100

Research and development	—		—		53		53		—		—		53		53
Restructuring costs	—		481		15		496		—		481		15		496
	—		481		168		649		—		481		168		649
2024 Restructuring Program
Cost of sales	55		—		10		65		96		—		5		101
Selling, general and administrative	—		—		1		1		—		—		1		1

Restructuring costs	—		6		58		64		—		7		126		133
	55		6		69		130		96		7		132		235
	$	55	$	487	$	237	$	779	$	96	$	488	$	300	$	884


	Three Months Ended June 30, 2024								Six Months Ended June 30, 2024
($ in millions)	Accelerated Depreciation		Separation Costs		Other Exit Costs		Total		Accelerated Depreciation		Separation Costs		Other Exit Costs		Total
2024 Restructuring Program
Cost of sales	$	66	$	—	$	—	$	66	$	131	$	—	$	51	$	182
Selling, general and administrative	—		—		31		31		—		—		36		36
Research and development	—		—		—		—		—		—		2		2
Restructuring costs	—		19		61		80		—		111		91		202
	$	66	$	19	$	92	$	177	$	131	$	111	$	180	$	422

Accelerated depreciation costs primarily relate to manufacturing, research and administrative facilities to be fully or partially closed or divested and equipment to be disposed of as part of the programs. Accelerated depreciation costs represent the difference between the depreciation expense to be recognized over the revised useful life of the asset, based upon the anticipated date the site will be closed or divested or the equipment disposed of, and depreciation expense as determined utilizing the useful life prior to the restructuring actions. All the sites will continue to operate up through the respective closure dates and, since future undiscounted cash flows are sufficient to recover the respective book values, Merck is recording accelerated depreciation over the revised useful life of the site assets. Anticipated site closure dates, particularly related to manufacturing locations, have been and may continue to be adjusted to reflect changes resulting from regulatory or other factors.

Separation costs are associated with actual headcount reductions, as well as involuntary headcount reductions which were probable and could be reasonably estimated.

Other exit costs in 2025 and 2024 include asset impairment, facility shut-down, contractual termination, and other related costs, as well as pretax gains and losses resulting from the sales of facilities and related assets. Additionally, other activity includes certain employee-related costs associated with pension and other postretirement benefit plans (see Note 9) and share-based compensation.

The following table summarizes the charges and spending related to restructuring program activities for the six months ended June 30, 2025:


($ in millions)	Accelerated Depreciation		Separation Costs		Other Exit Costs		Total
2025 Restructuring Program
Restructuring reserves January 1, 2025	$	—	$	—	$	—	$	—
Expenses	—		481		168		649

Non-cash activity	—		—		(53)		(53)
Restructuring reserves June 30, 2025	$	—	$	481	$	115	$	596
2024 Restructuring Program
Restructuring reserves January 1, 2025	$	—	$	564	$	—	$	564
Expenses	96		7		132		235
(Payments) receipts, net	—		(23)		(126)		(149)
Non-cash activity	(96)		—		(6)		(102)
Restructuring reserves June 30, 2025	$	—	$	548	$	—	$	548