Bayer cuts 12,000 jobs and sells its animal health products business

Bayer will cut 12,000 jobs as part of a cost reduction, with the German group of pharmaceutical and chemical products seeking to regain investor confidence following the legal setbacks of its acquisition of Monsanto earlier this year.

Other measures include the sale of its animal health products division, as well as its Coppertone and Dr. Scholl product lines. Bayer also plans to divest the 60% stake in the Currenta service provider. According to Bernstein's estimate, the combined divestments could generate around 7 billion euros.

Bayer said the search for efficiency would generate annual savings of 2.6 billion euros from 2022, but would result in one-time costs of about 4.4 billion euros. euros. The group plans to accept write-downs and write-offs worth 3.3 billion euros in the fourth quarter of 2018. Bayer employs approximately 118,200 people.

During a conference call, Bayer's managing director, Werner Baumann, said the cost reductions had nothing to do with the group's legal woes.

"These measures are totally independent. They have nothing to do with the Monsanto acquisition and the glyphosate litigation. . . These measures are independent and aim to further improve the competitiveness of the company in the future. "

The planned measures, he added, would "free up resources for innovation and growth", and allow Bayer to focus "on its core activities in the areas of pharmaceuticals, consumer health and the sciences of culture ".

Bayer has been under pressure from investors since August, when a California court made a landmark decision linking two Monsanto's glyphosate-based pesticides to cancer. Roundup and Ranger Pro products are now part of Bayer's portfolio.

The California jury awarded $ 289 million in damages to a school gardener with terminal cancer who was repeatedly exposed to herbicides. This amount has since been reduced on appeal, but badysts and investors are worried that the group will face an avalanche of claims and similar decisions in the years to come.

Bayer shares, which have lost a third of their value since August, lost nearly 2% as a result of Thursday's news.

Job losses should particularly hit the group's base in Germany. Following the integration with Monsanto, about 4,100 jobs will be cut in the field of crop science, with 5,500 to 6,000 jobs expected to disappear in "business functions, support functions, services to national companies and platforms ". Approximately 900 jobs will be cut from Bayer's Pharmaceutical Research and Development Division and 1,100 from the Consumer Health Division.

The IGBCE, the German trade union representing workers in the chemical industry, said it would support the job-reduction plan, pointing out that Bayer was committed to that there is still staff until 2025.

Bayer announced Thursday expecting earnings per share of 6.80 euros in 2018, up from 5.70 to 5.90 euros this year. He also set the target for a basic earnings per share of 10 euros by 2022. According to Bernstein badysts, the target for 2019 is 7% lower than the consensus estimates .