Bayer is shedding around 1,250 jobs from its pharma division as part of a major restructuring exercise that will see its total headcount cut by around 10% by the end of 2021.
The shake-up – which follows its $66bn takeover of agricultural products company Monsanto – will also result in the sale of its animal health division to narrow its focus to pharma, consumer health and crop science. It’s estimated a sale of the unit could bring in up to €7bn.
Bayer is also thinking of selling off some of its consumer health brands – notably Coppertone sun care and Dr Scholl foot care products – as well as its 60% stake in German chemical production facility Currenta.
CEO Werner Baumann
Bayer chief executive Werner Baumann said the changes, which will cost the company more than €4bn to push through, “are necessary and lay the foundation for Bayer to enhance its performance and agility.” He also insisted that the moves have nothing to do with potential liabilities faced by Bayer in connection with lawsuits filed against Monsanto over its glyphosate herbicide and alleged links to cancer.
The revamp will free up €2.6bn net annually from 2022, with the savings reinvested in core businesses, according to the company. All told, it intends to invest around €35bn across its divisions through the end of 2022, two-thirds of which will go on R&D.
Around 900 jobs will go across the Germany group’s pharma R&D operations, out of 12,000 losses in total from its current headcount of around 118,000. Another 350 pharma jobs will go as a result of a decision not to make use of a recently-completed manufacturing facility for haemophilia treatment factor VIII in Wuppertal.
In its statement, Bayer said the introduction of a number of new products has led to a significant increase in competition in the haemophilia segment, and in order to remain competitive it has decided to focus all its recombinant factor VIII production at its facility in Berkeley, US. The company in the midst of a rollout of its long-acting factor VIII product Jivi (damoctocog alfa pegol).
The consumer health unit will lose around 1,100 workers, with crop science shedding 4,100 and another 5,500-6,000 expected to go from Bayer’s corporate operations.
German trade union IG BCE – which represents workers in the chemical and energy sectors – said employee representatives had signed a joint declaration with Bayer’s board that would provide protection against further operational redundancies through to the end of 2025.