Merck KGaA has outlined a cost-cutting programme to address “unprecedented market shifts, increasing competition in key product areas and existing inefficiencies”.
The changes are part of the German company’s “comprehensive transformation programme” announced last year and consist of two phases. In the first two years, Merck plans to set up a new leadership organisation, implement efficiency measures and develop a long-term growth strategy and in the second phase, the focus will be on exploiting new growth opportunities.
Chairman Karl-Ludwig Kley said the moves are necessary “in order to deliver recurring cost reductions and free up resources for investment in promising growth areas”. He added that “while it is regrettable, our preliminary analysis has shown that the overall purpose of our transformation programme and the expected measures to realise it may lead to workforce reductions across all businesses and regions.”
‘Premature’ to give specific figures
Merck says that the next step will be consultation with the respective employee representatives in different countries. The Darmstadt-based group added that until these talks are further advanced, “it would be premature to announce any detailed cost or headcount reduction plans”.
Dr Kley went no to say that “we have a view on what needs to be achieved…and we will consider any pragmatic proposals”. The company has made a couple of major acquisitions in the past five years – Serono in 2007 and Millipore in 2010 – and this buys did not result in any major job losses.
As the Darmstadt-headquartered group has grown, the need has now arisen to “streamline the organisational structure to be leaner, easier to navigate and to speed up decision-making processes”, Merck says.
Merck spokeswoman Phyllis Carter told PharmaTimes World News that the moves will not involve cutbacks in research. The reshaping will involve all businesses, for example neurodegenerative disease, oncology and liquid crystals, and all regions.
