The Strategist

Bayer AG to cut 12 thousand jobs


11/30/2018 - 11:34



Bayer AG plans to cut 12 thousand jobs and leave the business of producing veterinary drugs, reports Bloomberg.



sebastian.rittau
sebastian.rittau
The German company announced a number of steps, including leaving the segments of sunscreen and foot care products. It is noted that this move will strengthen the main divisions - the pharmaceutical and agricultural business of Bayer.

The cuts, including a significant number of layoffs in Germany, will affect about 10% of the company's employees.

Bayer has been under pressure after the takeover of the American producer of seeds and agricultural chemicals Monsanto Co. The deal turned Bayer into the world's largest producer of agricultural chemicals and seeds.

However, investors questioned the new business model. Shares fell after the deal announcement and closing. Bayer’s market value has fallen by around € 30 billion since August.

In August, a US court ordered Monsanto to pay $ 289 million to a gardener who claimed he had cancer because of glyphosate contained in weed drugs, including Roundup.

At least 9 thousand other claims are pending.

“Today’s decisions are not due to recent acquisitions and certainly not due to glyphosate trials in the United States,” Bayer CEO Werner Baumann said on Thursday. “Absolutely nothing to do with this.”

Of the 12 thousand jobs that are planned to be reduced, half are likely to be related to corporate and support functions. Another third of the cuts will take place in the crop division, as integration with Monsanto continues, Bayer said. 1,250 jobs are likely to be reduced in the pharmaceutical division, with 350 jobs associated with the new plant in Wuppertal (Germany). An additional 1,100 jobs will be cut at Consumer Health (OTC products).

The cost of Animal Health may be € 6.5 billion, says analyst Sanford C. Bernstein & Co. Wimal Kapadia. This unit sells veterinary drugs for farm and domestic animals.

According to Baumann, the company is most interested in key areas such as the manufacture of drugs for blood, heart, and cancer drugs.

source: bloomberg.com




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