Swiss drug manufacturer Novartis AG (NYSE: NVS) said it plans to cut 2,000 jobs in an effort to reduce costs and save about $200 million annually.

The job eliminations will be executed over the next three to five years and involve almost 2 percent of the workforce, the company said.

The Wall Street Journal reported that most of the job cuts will take place in Switzerland and the United States.

Novartis shares are down about 3 percent in mid-morning trade in New York.

Novartis sites in Italy and Switzerland will shut down, with some work outsourced to countries with lower labor costs. Research activities currently based in Switzerland will be moved to the U.S.

The company will take a charge of $300 million in connection with the restructuring.

Novartis posted a profit of $3.5 billion in the third quarter, but is being hurt by the effects of a pervasively strong Swiss franc and lower drug prices.

The drug sector as a whole is suffering not only from sharp declines in drug prices but also from a flurry of patent expirations.

Export-dependent Swiss companies on the whole are planning job reductions. While the nation’s central bank, the Swiss National Bank, recently placed a cap on the Swiss franc against the euro, fears persist that the currency remains overvalued

The main reason for the job cuts and cost reductions is the current difficult pricing situation, which in Europe hit our sales by about 5 percent year-to-date, said Novartis’ chief executive, Joe Jimenez, according to WSJ.

I don't expect the pricing environment to get better anytime soon.”

The WSJ noted that Jimenez, an American who took the top job last year, is a former Blackstone manager who is committed to cutting costs.