The drugs and life science company Merck has announced a program of cost savings and job losses in order to boost sales. Unions have reacted angrily to the move and will oppose the planned cuts.
The big pharma company Merck KGaA has outlined its plan to make €300 million in savings from its Serono drugs unit. Most of this saving is expected to come from cutting staff at its headquarters.
In April 2012, according to Bloomberg, Merck announced that it would be shutting down its Serono HQ in Geneva, and in May 2012 the company stated that it expects to make around €180 million from cutting 500 sales, general and administration posts from the Geneva site over the next two years. The remaining €120 million in savings will come from the planned closing of the R&D hub in Geneva.
CBS News notes that Merck has undertaken this move in order to boost profits and sales. In 2011 sales were €9.9 billion. The target by 2012 is 10.7 billion, which the company thinks will only be achievable if it cuts staff.
Karl-Ludwig Kley, chairman of the executive board of Merck, is quoted by InPharma as saying: “Merck faces unprecedented market shifts and increasing competition in key product areas. Today, we are fortunate that we can address these challenges from a position of relative strength. However, if we do not take urgent action, we will face the prospect of tackling these issues from a much weaker position.”
In response to announcement the local union has threatened strike action. The union is concerned not only with the 500 planned job losses, it also fears that further job losses will follow and that the 500 heads proposed is an under estimate.