NEW YORK - Eli Lilly and Co said on Monday it plans to cut 5,500 jobs, or 13.5 percent of its workforce, in a restructuring meant to bolster the company as it girds for generic competition by late 2011 on its top-selling Zyprexa schizophenia drug.

The Indianapolis-based drugmaker, whose revenue outlook has also been dimmed by competition for its Byetta diabetes drug and safety concerns for its recently approved Effient blood clot preventer, said it aims to cut its cost structure by $1 billion by the end of 2011.

The company said it plans to shrink its workforce to 35,000, from its current strength of 40,500, by the end of 2011. But the new headcount does not include any new sales force additions in fast-growing emerging markets and Japan, Lilly said.

Lilly's streamlining program is similar to one recently implemented by Pfizer Inc, the world's biggest drugmaker, which is battening down the hatches for the patent expiration -- also in 2011 -- on its Lipitor cholesterol fighter.

Lilly said it will create a new organizational structure by Jan. 1, with five global business units. They include oncology, diabetes, emerging markets, established markets and its Elanco animal health business.

The company has a long-standing focus on diabetes and cancer, and both are hot areas because of the aging population and the hefty price tags of those drugs.

While our financial performance during the past few years has been strong, we will soon enter the most challenging period in our company's history, company Chief Executive John Lechleiter said in a release. This calls for strong measures to speed our output of new medicines, better meet the changing needs of our customers and reduce our costs.

Company shares were up 1 percent at $33.18 in morning trading on the New York Stock Exchange. (Reporting by Ransdell Pierson, editing by Dave Zimmerman)