Bayer set for 4,500 job cuts
pharmafile | November 19, 2010 | News story | Research and Development, Sales and Marketing | Bayer, Cost cutting, emerging markets
Bayer has announced large scale job losses aimed at saving 800 million euro savings in the coming years.
The cuts are a very clear indication in a massive shift in investment from the mature markets to the emerging markets, such as India, China and Brazil.
Around 4,500 positions are to be cut, while some 2,500 new jobs will be created over the same period, particularly in the emerging markets, the fastest growing areas for pharma.
Around 1,700 of these cuts will come from Germany, where Bayer has its headquarters.
Bayer says it hopes to reinvest around half of the 800 million euro savings.
The company says it is likely to take one-time restructuring charges of around 1 billion euro, with part of this already being incurred in the fourth quarter of 2010.
The German pharma firm said that their future focus would be on researching, developing and marketing new products, particularly in its HealthCare and CropScience businesses, and on expanding activities in the emerging markets.
Bayer said that this will require a high level of investment in the coming years, but sales and earnings are under pressure from generic products, rising development costs and the effects of healthcare reforms.
Bayer’s chairman, Dr. Marijn Dekkers, said that this was reason behind its job cuts: “To finance the expansion of our growth activities, we need to redirect resources, improve efficiencies and cut costs.
“Bayer has great business potential in all three subgroups. To better exploit this potential, we must continue to bundle existing resources and streamline our structures.”
Dekkers said that this was “the only way” Bayer could sustainably finance its investment in growth and innovation in new pharma products, in its BioScience business and in the expansion of Bayer’s capacities in Asia.
“The cutbacks involved will not be easy, but they are necessary,” Dekkers added. “I am convinced that with more innovation and less administration, Bayer can become a better and faster company.”
This follows a series of similar decisions from big pharma over the past year, with Roche, GlaxoSmithKline, Genzyme, Merck and Pfizer all cutting jobs and sites in reaction to major healthcare reforms and looming patent expiries.
Ben Adams
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