Bayer recently announced that it is embarking on a comprehensive restructuring plan with significant staff reductions.
The Germany-based pharma giant’s management aims to enhance operational performance through a new model called “Dynamic Shared Ownership” (DSO). This strategic change aims to reduce hierarchies, eliminate bureaucracy, streamline structures, and accelerate decision-making processes.
The new model, however, will come at the expense of the jobs of many managerial employees. The layoffs will take place in a decentralized manner through 2025, which means that Bayer cannot initially quantify the size. Bayer has committed to no compulsory redundancies until the end of 2026.
As of the end of 2022, Bayer had more than 101,000 employees, with about a fifth in Germany.
Bayer’s CEO Bill Anderson, who took the helm in June 2023, has emphasized a focus on internal reorganization. This approach delays any break-up plans despite pressure from several investors who have long urged the company to separate its Pharmaceuticals, Consumer Health, and Crop Science units.
Bayer’s financial performance has been strained, largely due to losses at its Monsanto division. Legal challenges associated with the health effects of Monsanto’s glyphosate-based weedkiller Roundup have played a major role.
“Bayer is currently in a difficult situation for various reasons. In order to make rapid, sustainable improvements to our operational performance and our room to maneuver, far-reaching measures are necessary. We want to get Bayer back on the road to success quickly,” Heike Prinz, member of the Board of Management and labor director of Bayer AG, said in a news release.
“Company management and employee representatives must pull together and agree on the steps expressed in the Joint Declaration to overcome this challenging situation and secure the future of the company. Only through decisive, collective action will we be able to remove all internal obstacles and put Bayer back on track for future profitable growth.”