Merck KGaA intends to cut 1,100 jobs in Germany by the end of 2015 and will halt production at two German facilities.
The measures are part of what the company calls its ‘Fit for 2018’ programme, which is seeing the company implement a series of efficiency measures as it prepares to cope with increased competition for key products, such as big selling multiple sclerosis (MS) treatment Rebif (interferon beta-1a), and a more challenging pharma market.
Merck had already announced plans to close the Geneva headquarters of its biotech unit Merck Serono, but this new move now takes the company’s cost-cutting drive into its home nation of Germany.
Positions will mainly be reduced though voluntary-resignation and early retirement programmes, said Merck, with all divisions and functions effected.
Forced redundancies will only be implemented if staff numbers are not reduced sufficiently by the end of 2017 following talks with the Works Council, which represents employees. However, this is with the exception of possible site closures.
These include the halting of both the production of industrial salts in Lehrte and filling operations in Hohenbrunn. Around 140 staff work at the two sites, and Merck is in negotiation with the Works Council about potential arrangements for them.
In addition, further costs will be saved through a ‘restructuring’ of the company’s compensation system for effected employees.
In a comment to PMLiVE, a Merck spokesperson said: “This will entail re-evaluating, in part, positions subject to collective bargaining agreements as well as negotiated salaries and the corresponding pay scale groupings.
“In addition, all voluntary benefits in excess of the agreed pay scale will be discontinued, apart from a few exceptions. For example, the vacation bonus is to be abolished for employees who are not subject to collective bargaining agreements.”
Kai Beckmann, member of the executive board and responsible for Human Resources, commented: “We have had constructive discussions with Works Council members for the past several months and are happy to say that we now have a roadmap that will position Merck Germany in such a way that the company is prepared for the challenges we will face.”
The company still intends to increase spending in some areas over the course of its efficiency drive, with plans to invest €250m at its headquarters in Darmstadt, where several hundred staff previously based at Geneva are being relocated, as well as other sites in Germany.
“Darmstadt is to be expanded to become an R&D center of excellence, with a tightly networked research and knowledge platform for both pharmaceuticals and chemicals,” said the company.