Bayer, the German chemicals and pharmaceuticals corporation, has announced that 12,000 jobs will be slashed in a large-scale organisational restructure. This follows the takeover of Monsanto and will result in a potential saving of €2.6bn (£2.35bn) a year from 2022. The group already employs almost 120,000 workers, meaning that approximately one in ten jobs will be affected, including a large number of roles in Germany.
The cost of the takeover was close to €63bn, making it one of Germany’s biggest corporate takeovers in history. Approximately eight weeks later, a court decision in the United States ruled that Bayer must pay millions of dollars in damages due to Monsanto’s manufacturing of a weed killer with supposed cancer risks.
This ruling caused shares in Bayer to crash by more than one-third. Concerns about the weed killer, which is known as Roundup, were raised by a groundskeeper who claimed that his cancer was caused by the product. Monsanto has since released a statement reassuring people the herbicide weed killer is perfectly safe if used as directed. The damages have since been reduced by a judge.
Bayer has manufactured a wide range of pharmaceutical products throughout its history. Animal health has been a large part of the business, making Bayer the fifth largest player in the industry. Bayer has been the largest trader of flea and tick medication for small animals in addition to providing veterinary medication for livestock.
After the restructure, Bayer plans to scrap its involvement in the animal health market, concentrating instead on crop science and health pharmaceuticals. It also plans to close its famous sun care and foot care divisions. With this restructure comes job losses, with the crop science division seeing over 4,000 jobs lost by the end of 2021.
Other positions will be terminated as the merger continues, with 6,000 jobs lost in corporate functions, 1,100 in consumer health, almost 1,000 in pharmaceuticals, and 350 in manufacturing. This accounts for almost 10 per cent of Bayer’s workforce. The chairman of Bayer has confirmed that these changes are necessary for Bayer to progress and take full advantage of the growth potential of the crop science and pharmaceutical industries.
Employees in Germany have taken part in protests at the Wuppertal facilities, arguing against Bayer’s decision. When the takeover was discussed, Bayer assured its workforce that their jobs would be safe until at least 2025; therefore, the announcement of immediate losses has come as a huge shock. With the bad press surrounding the Roundup lawsuit and the huge number of job cuts, employees are unsurprisingly feeling both fearful and angry.
Investors have also been feeling concerned after the cancer-causing weed killer lawsuits and job losses; however, Bayer has assured them that the two are not related. These events have done nothing to reassure its shareholders, making this a priority for Bayer as it focuses on its future in pharmaceuticals.