Pfizer on Wednesday said it has launched a new multi-year program to reduce costs as it works to rebound from the rapid decline of its Covid business. 

The announcement is in addition to another $4 billion cost-cutting effort, which Pfizer announced last year as demand for its Covid vaccine and oral drug Paxlovid slumped. 

In a securities filing, the pharmaceutical giant said the first phase of its new program is focused on operational efficiencies and is expected to save the company about $1.5 billion by the end of 2027.

One-time costs related to the initial stage of cuts are expected to be about $1.7 billion, including severance for an unspecified number of laid off employees. The company expects to record the majority of those charges this year. 

Pfizer also expects the program to involve “network structure changes” and “product portfolio enhancements.”

“Given the complexity in manufacturing and longer lead times required to make changes, this program will be a multi-phased effort,” Pfizer said in the filing. 

Pfizer is trying to shore up investor sentiment after its shares fell nearly 50% in 2023, making it the worst-performing pharmaceutical stock last year. That share drop erased more than $100 billion in Pfizer’s market value.

As demand for Covid products plummeted last year, Pfizer also disappointed Wall Street with the underwhelming launch of a new RSV shot, a twice-daily weight loss pill that fell short in clinical trials and an in initial 2024 forecast that missed expectations.

But Pfizer pleased investors earlier this month after it reported first-quarter revenue and adjusted profit that beat expectations and hiked its full-year earnings outlook. The pharmaceutical giant said its new profit guidance accounts for its “confidence” in its business and its ability to slash costs.

“We are cautiously optimistic about the year,” Pfizer CEO Albert Bourla said during an earnings call on May 1.

This story is developing. Please check back for updates.