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This is how Bayer justifies its huge job cuts
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Bayer wants to cut 12,000 jobs worldwide
By the end of 2021, the Bayer Group plans to cut 12,000 jobs worldwide, mainly in Germany. The crop protection and veterinary sectors are particularly affected.
After the embarrbadment caused by glyphosate, the next shock treatment now threatens Bayer: the group proceeds to radiation of several billion and mbadively suppresses jobs, even in Germany. Is the group so much out of the crisis?
eIt was a shock with notice. In recent weeks, it has been repeatedly speculated that the defensive group Bayer could sell shares of the company and reduce jobs. Now speculation has become certain.
The Leverkusen-based company plans billions of dollars in cuts and plans to cut its 12,200 jobs out of a total of 118,200 jobs by 2021. Thus, every tenth position is available. A "significant portion" of the reduction will affect Germany, Bayer said after Thursday's supervisory board meeting. However, operational layoffs should not exist before the end of 2025.
"The proposed measures have nothing to do with our recent takeover of Monsanto or with the glyphosate debate," said managing director Werner Baumann at the beginning of the short-term teleconference. "Thanks to the measures we are taking now, we are creating the conditions necessary to sustainably increase Bayer's performance and profitability," he said in support of the stringent austerity program. "As a life sciences company, we are ideally positioned for the future."
Stock market reacts angrily
According to Baumann, the cumulative measures should increase the competitiveness of the group and, with the synergies expected from the Monsanto acquisition in 2022, generate an annual turnover of 2.6 billion euros. The stock market nevertheless reacted to the news. Meanwhile, Bayer shares fell by more than 1%, with high sales at € 63.50. Above all, extraordinary write-downs announced in the third quarter, amounting to 3.3 billion euros, have obviously provoked irritation among investors.
In recent months, doubts that Bayer is still on track have grown enormously. Since the acquisition of the US company Monsanto, the group has been facing a growing number of lawsuits against Monsanto's glyphosate company.
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The weed poison is suspected of causing cancer in humans. The group rejects him and has already announced that he will resolutely oppose the accusations. Given the great uncertainty surrounding the continuation of the lawsuit, Bayer shares have lost about a third of their value since the summer of this year alone.
But the pharmaceuticals sector, which was previously the Bayer showcase segment, has also recently shown surprising weaknesses, which have further weighed on the stock price. Now the group wants to take countermeasures. The veterinary sector, which is already much too small to take a leading position in the world, must be sold. A special operation in Wuppertal will also be closed.
Brand Dr. Scholl & # 39; s for sale
The measures in the OTC trade are even more extensive. The so-called Consumer Health division, which also includes long-time favorite drugs such as aspirin or Rennie acid inhibitor, has been in crisis for some time. Originally, Bayer had adopted the Big One and had therefore acquired much of Merck's US operations in 2014 for a lot of money. However, many of the high-priced products have not proved to be a selling factor, but rather seriously damaged brands, in which Bayer has invested heavily over the years.
Now the CEO, Baumann, pulls the rope. The sun protection line Coppertone and the pedicure of Dr. med. Scholl must be sold, the whole area is reorganized. In total, about 1,100 jobs will disappear in the consumer health sector.
The supervisory board approved "unanimously" the corresponding plans of the executive board, he said. As announced in the past, the merger of Bayer and Monsanto's agrochemical business will result in the loss of 4,100 jobs. In addition, it plans to reduce about 900 jobs in pharmaceutical research. Of these, only 350 jobs are linked to the closure of a factor VIII operation in Wuppertal. Between 5,500 and 6,000 additional jobs need to be reduced in cross-cutting and cross-cutting roles.
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In addition, Bayer is considering the sale of its 60% stake in German location services provider Currenta. After the successful separation of Covestro, the use of Currenta's services was disproportionate compared to Bayer's property, the company said.
"With these necessary adjustments, we will be even more powerful and agile in the future," Baumann said. At the same time, Bayer was aware of the scope of the decisions for employees and would implement the planned measures "in a fair and responsible manner". Management and employee representatives agreed in a joint statement on a new agreement on "securing the future of Bayer 2025". As a result, redundancies in Germany are generally excluded until the end of 2025. At the moment, however, no concrete information can be provided on the extent of the reduction in the workforce in different sites.
It should not be different next week. Almost all of Bayer's board of directors will then answer questions from investors and fund managers at a conference on financial markets in London. The appointment is planned for a long time. According to the news of today, the number of questions addressed to Bayer's management should not have been reduced.
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