Bayer, the pharmaceutical and agricultural chemicals group based in leverkusen, germany, plans to cut more than one in ten jobs worldwide. A total of around 12 jobs are to be cut by the end of 2021.000 of the 118.200 jobs to be cut.
A "significant portion" of the job cuts will take place in germany, the company announced. Exact figures for germany were not disclosed. The employees’ side agrees with the "deep cuts", but points to commitments for employees and sites for the next few years.
The job cuts in the federal republic are to be made on the basis of social agreements, as the company emphasized. Bayer agreed with the works council on a future-proofing program that excludes redundancies in the bayer AG workforce in germany until the end of 2025. At the same time, bayer announced impairment charges totaling 3.3 billion euros. They will mainly affect the weak over-the-counter medicines business and the pharmaceuticals division.
The massive reduction in personnel is part of a program to increase efficiency with which the bayer group aims to significantly enhance its innovative strength and competitiveness. Bayer’s workforce is expected to shrink even more than the job cuts alone would suggest. The sale of parts of the company is expected to result in a further 10.000 employees to leave the group and continue working under a different roof. According to employee representatives, the joint declaration for subsidiaries that are up for sale safeguards working conditions.
Bayer is currently struggling on several fronts. In the USA, following the acquisition of monsanto, bayer is facing numerous lawsuits relating to the weedkiller glyphosate. The plaintiffs accuse monsanto, the U.S. Company taken over by bayer, of selling glyphosate, a carcinogenic agent, and of failing to provide sufficient information about its harmfulness. Bayer firmly rejects these accusations. But bayer stock plunged after first glyphosate lawsuit lost.
Bayer ceo werner baumann stressed that the planned cuts were not a reaction to the monsanto acquisition and certainly not to the glyphosate lawsuits in the u.S. "These necessary adjustments will make us even more powerful and agile in the future," he said. The group is thus "optimally positioned for the future".
Bayer’s over-the-counter medicines business is currently also performing significantly worse than hoped for. And in the important pharmaceuticals business, the company has recently had little to report in the way of promising new developments. The group now wants to address all these problems with the new mab package.
For this, the group is prepared to make deep cuts. How to sell the game with animal health. Although it offers major growth opportunities, bayer intends to focus its investments on its core businesses of pharmaceuticals, over-the-counter medicines and crop protection.
The 60 percent shareholding in the german chemical site service provider currenta is also to be sold. In the area of over-the-counter medicines, bayer intends to divest itself of the companies acquired at a high price only a few years ago from u.S. Competitor merck& co acquired sun care with the brand coppertone and skincare with the brand dr. Scholl’s disconnect.
The important pharmaceuticals business is to be realigned in order to boost innovative strength. The leverkusen-based group intends to reduce its internal research capacities and instead increase investments in joint projects with partners and in external innovations. Around 900 jobs in pharmaceutical research are to be cut as a result.
The bulk of the announced job cuts will be in the crop protection division and in administration. Around 4100 jobs are to be cut as part of the monsanto takeover, a further 5500 to 6000 jobs in group and cross-divisional functions, around 1100 in the realignment of the over-the-counter medicines area. Together with the expected synergies from the monsanto takeover, the mabbased package is expected to release annual funds of 2.6 billion euros starting in 2022.
Chairman of the central works council and vice chairman of the supervisory board oliver zuhlke said: "the protection against compulsory redundancies achieved until the end of 2025 is a milestone." supervisory board member petra reinbold-knape of the trade union IG BCE stressed that the plans of the bayer management board meant deep cuts. "The employee representatives nevertheless supported this step, because in return we achieved reliable commitments for the employees and the sites for the next seven years."