Roche set to cut 4,800 jobs worldwide
pharmafile | November 17, 2010 | News story | Manufacturing and Production, Research and Development, Sales and Marketing | Jobs, Roche, avastin, cuts, taspoglutide
Roche’s ‘Operational Excellence’ programme will see it cut 6% of its global workforce over the next two years.
The initiative is expected to result in annual cost savings of CHF2.4 billion ($2.41 billion) for the Swiss pharma firm from 2012 onwards, with implementation scheduled for next year.
The plans will see its workforce cut by 4,800 positions worldwide, which amounts to 6% overall.
The largest reductions are planned in both sales and marketing and in manufacturing, with around 800 jobs being transferred to other Roche sites and 700 positions outsourced to third parties.
Most of the planned job reductions will occur in the pharmaceuticals division, particularly in the global sales and marketing departments, and in manufacturing.
Worldwide, Roche plans to reduce its workforce in sales and marketing by a total of 2,650 positions. This is a result of its recent setback for diabetes treatment taspoglutide and the healthcare reform programmes in the US and in Europe.
Overall, 6,300 job positions will be affected and Roche expects CHF2.7 billion in restructuring costs from 2010 through to 2012, only part of which will be cash-related.
The majority of affected positions will come from the US, with 3,550 jobs set to be cut or re-positioned. 1,300 roles are affected in Europe and 770 in Switzerland.
Roche chief executive, Severin Schwan, said: “This is a comprehensive, focused initiative to reinforce Roche’s long term innovation capability in the face of increased price pressures and a more challenging market environment.
“We will continue to drive our highly promising product pipeline to help seriously ill patients and contribute to more efficient healthcare systems.”
Schwan added that these measures are “necessary to ensure sustained success of the company” and that he would make ‘every effort’ to find ‘socially responsible solutions’ for the employees affected.
Roche will also discontinue certain activities in research and early development that include RNA interference research in Kulmbach, Germany; Nutley, New Jersey; and Madison, Wisconsin, in the US.
In addition, plans also include reorganising certain internal functions to free up resources for upcoming phase II studies of new molecular entities, with around 600 positions being affected.
In an accompanying statement Roche said that the ‘Operational Excellence’ programme is aimed at adapting cost structures to an ‘increasingly challenging market environment’ and achieving “significant efficiency and productivity gains”.
During the last five years most big pharma firms have been cutting costs and jobs to help offset major patent expiries, and Roche has finally followed suit after managing to actually increase its staff when others were making marked reductions.
Overall the Swiss firm has a strong portfolio, with its blockbuster oncology drug Avastin set to be the top selling drug globally by 2015, but price erosion in the EU and the US has affected the industry as a whole, and Roche has not been immune.
Roche said it would immediately begin discussions with employee representatives in the respective countries and will conduct the consultation process in an open and constructive manner.
Among other things, Roche said, this will include informing affected employees as soon as possible and offering them ‘appropriate assistance and support’.
Ben Adams
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