Merck KGaA cuts over 10% of German workforce
pharmafile | September 5, 2012 | News story | Research and Development |
Merck KGaA is to get rid of more than 10% of its workforce in Germany over the next three years as part of a global efficiency programme.
The Darmstadt-based pharma group has said more than 10% of jobs in the country – 1,100 out of 10,900 posts – will go by the end of 2015.
Wholesale restructures to meet changing market conditions have been a feature of pharma businesses worldwide over the past few years.
Employees further from home have already felt the bite of Merck’s ‘Fit for 2018’ policy, announced in February, which is intended to secure Merck’s long-term competitiveness.
The company announced in April that the HQ of pharma division Merck Serono would be moved from Geneva to Darmstadt, with the loss of 500 jobs across Swiss operations and the transfer of another 750 to other locations.
The firm bought Serono, once Europe’s biggest biotech company, five years ago for over $13 billion, and staff have threatened strikes against the cuts.
Seeking to head off similar industrial action in Germany, Merck says it signed an agreement with staff representatives to handle the latest round of downsizing ‘mainly’ through voluntary redundancies and early retirement.
Merck says there will be no compulsory redundancies in Darmstadt or at the company’s Gernsheim site until the end of 2017 – but adds the caveat that workers could be forced out before this in ‘possible site closures and transfers that are still being assessed’.
Further cost-saving measures will include the reorganisation of support functions such as logistics, with some work – including what Merck terms ‘routine jobs connected’ to the approval of drugs – handed to third parties.
It had considered a more extensive outsourcing of functions but seems to have rowed back on that plan, at least for the time being.
Changes to remuneration for existing personnel are on the cards, however, with Merck pledging further cost savings “as the result of a restructuring of the compensation system”.
The group also plans to invest at least €250 million across its German operations over the next two years, with global HQ Darmstadt expanded into an R&D and production centre.
“We now have a roadmap that will position Merck Germany in such a way that the company is prepared for the challenges we will face,” said executive board member Kai Beckmann.
“Now, we need to consistently implement the measures and continue moving ahead with the changes in our company,” Beckmann added.
