In a strategic move, Bayer plans to cut as many as 12,000 jobs over the next few years, shed its animal care business, and exit from the Coppertone and Dr. Scholl’s consumer product lines.
Most of the job cuts will come from operations in Germany, according to the company, which employs some 118,000 workers globally.
Bayer acquired U.S. seed and weed-killer maker Monsanto Co. this year. It says with the “synergies expected from the acquisition of Monsanto” and other efficiency and structural measures, including the job cuts, “Bayer anticipates annual contributions of 2.6 billion euros from 2022 on.”
Bayer announced that it aims to strengthen its core life science businesses through the moves to enhance productivity and innovation while significantly improving competitiveness.
“We have made very good progress with Bayer’s strategic development in recent years. As we now proceed with these measures, we are laying the foundation to sustainably enhance Bayer’s performance and profitability,” said Werner Baumann, chairman of Bayer AG’s Board of Management. “With these measures, we are positioning Bayer optimally for the future as a life science company.”
By shedding its Animal Care unit, the company plans to allocate additional resources to its core businesses of Pharmaceuticals, Consumer Health, and Crop Science.
In addition to the previously announced divestment of prescription dermatology products, Bayer will “review its strategic options in the coming months with a view to exiting the sun care (Coppertone) and foot care (Dr. Scholl’s) product lines,” while focusing on profit growth in its core Consumer Health categories.
The Consumer Health unit focuses on self-care, with products including Alka-Seltzer to treat heartburn, Miralax and Phillips for constipation, and Iberogast for irritable bowel syndrome and functional dyspepsia. Other brands in the unit include Claritin antihistamine for allergy relief, along with Bayer Aspirin and Aleve for pain relief.
In the Pharmaceuticals division, planned measures include a restructuring of internal R&D activities. “Resources freed up through the reduction of internal capacities are to be directed toward strengthening investment in collaborative research models and external innovations,” according to the company.
Within the hemophilia business, the introduction of a number of new products has led to a significant increase in competition. To remain competitive in the segment, Bayer has decided not to utilize the factor VIII facility it has built in Wuppertal, Germany, and to focus all recombinant factor VIII production in Berkeley, California.
In addition to the planned portfolio measures, Bayer intends to improve its cost structure, accelerate access to future technologies, and achieve greater efficiency across its supporting functions and services.