Huge losses forcing Bayer to restructure

 

BERLIN – Executives at German agrichemical and pharmaceutical giant Bayer will on Thursday present long-anticipated plans that involve extensive job losses.

Bayer announced on Wednesday evening that it would be introducing a new organizational model and examining all areas of the company for possible savings. Jobs will be eliminated, the company said, although it is not year clear how many positions or in what divisions.

Bayer management and labour representatives will answer questions from employees at the online event on Thursday afternoon

Current Bayer chief executive Bill Anderson took over leadership of the company last June, replacing long-time Bayer boss Werner Baumann, who was responsible for the company’s takeover of US-based crop science competitor Monsanto.

Bayer currently employs 22,200 people in Germany and 101,000 worldwide.

Huge losses at Monsanto have badly hurt Bayer’s financial performance, driven largely by huge legal costs associated with lawsuits over the health effects of Monsanto’s glyphosate-based weedkiller Roundup.

The outlook for Bayer’s pharmaceuticals division is also gloomy due to expiring patents on two particularly profitable drugs.

Competitors will soon be able to sell cheaper generic versions of Bayer’s blockbuster anticoagulant Xarelto and the eye preparation Eylea, which together have earned Bayer billions of dollars in profits.

“In order to make rapid, sustainable improvements to our operational performance and our room to manoeuvre, far-reaching measures are necessary. We want to get Bayer back on the road to success quickly,” said Heike Prinz, labour director at Bayer and a member of the company’s management board.

The aim of the restructuring is to “remove all internal obstacles and put Bayer back on track for future profitable growth,” she said.

Labour representatives have expressed support for the changes at Bayer.

“Our top priority is to secure the future of the employees at Bayer,” said Francesco Grioli of the IG-BCE trade union and a member of the Bayer Supervisory Board.

“A lot will change for our employees. We will work together to ensure that everyone can safely embark on new paths,” Grioli said.

The move has long been expected. Anderson is well-known for his views on lean corporate management and interest in changing the company’s culture.

Bayer’s new organizational structure, which provides for fewer decision-making levels than before, should be in place by the end of 2025.

The company has agreed to make no compulsory redundancies until the end of 2026, and employees who lose their jobs will be offered severance packages.