Merck & Company, the third-largest American drug maker, plans to close five manufacturing plants by 2008 and lay off 7,000 employees, about 11 percent of its work force, as it struggles with falling sales and profits, said reports.

The layoffs will save the company a total of almost $4 billion by 2010, or about $1 billion a year, Merck said. Overall spending on research and development will be flat, it said.

Next June, Merck will begin to face low-priced generic competition on Zocor, a cholesterol-lowering drug that is its top-selling medicine, with sales of $4.5 billion expected this year.

Merck has almost 62,000 employees, half of whom work in the United States, and 31 plants, including 6 in this country, mainly along the East Coast. About 3,500 of the jobs Merck plans to eliminate are in the United States, with the rest overseas, the company said. Besides the plant closings, Merck is shutting three research laboratories.

Merck also predicted that sales of two of its best-selling drugs would fall short of analysts' expectations in 2006. It said profit next year would probably be about $2.30 a share, not including restructuring costs, down from about $2.50 this year and slightly below Wall Street's forecasts.

Like other drug companies, Merck has struggled recently to find new medicines. And the company's formerly pristine image has been sullied by thousands of lawsuits over Vioxx, a painkiller that Merck stopped selling in September 2004 after a clinical trial showed Vioxx could cause heart attacks, added the reports.