The raft of pharma job cuts continues this week, with Bayer next to announce some 4,500 positions are to go.
Following quickly in the steps of Roche and Novartis, the German company is slashing jobs in a restructuring bid to invest its resources “more systematically in growing the company and enhancing its innovative capability”.
Faced with pressures from generics, rising development costs and healthcare reforms, Bayer’s focus will be on researching, developing and marketing new products, particularly in healthcare and CropScience, and on expanding activities in emerging markets.
“To finance the expansion of our growth activities, we therefore need to redirect resources, improve efficiencies and cut costs,” Dr Marijn Dekkers, Bayer AG management board chairman, said.
While 4,500 jobs are to be axed – including about 1,700 in Germany – the company said it planned to create some 2,500 new positions by 2012. However, the majority of these will be in emerging markets.
As part of the restructuring, the company will push an investment drive by creating annual savings of €800 million planned from 2013, of which half will be reinvested.
Bayer is anticipating the restructuring will cost about €1 billion by the end of 2012, with part of this amount already being incurred in the fourth quarter of this year. But Dekkers said Bayer needed to better exploit its potential, achieved by continuing to bundle existing resources and streamline the company structure. “That is the only way we can sustainably finance our investment in growth and innovation… The cutbacks will not be easy, but they are necessary. I am convinced that with more innovation and less administration, Bayer can become a better and faster company.”
Bayer’s news comes a week after Germany’s lower house of parliament voted to curb pharma’s freedom to set drug prices. Forecasts suggest this could cost the industry about €2 billion a year.