Bayer to Cut 6,100 Jobs Globally
After Acquisition of Schering
By JEANNE WHALEN
March 2, 2007 11:28 a.m. [WSJ]
FRANKFURT -- German chemical and pharmaceutical company Bayer AG Friday confirmed plans to cut 6,100 jobs as a result of its acquisition last year of drug maker Schering AG, and said its health-care unit will unveil a new research and development strategy in June.
Bayer, based in Leverkusen, Germany, acquired Schering last year for about €17 billion. Bayer predicted a year ago that it would make about 6,000 job cuts and forecast synergies of around €700 million from 2009 onward.
Bayer is to cut in total 3,150 jobs across Europe, 1,000 in the U.S., 750 in Japan and the Asia Pacific region, and 1,200 in Latin America and Canada.
The largest tranche, or 2,850 jobs, will be in administrative positions. About 1,850 production jobs will be cut, and 1,400 are to go in research and development.
Arthur Higgins, head of Bayer's health-care unit, said the job cuts include the closing of the company's oncology research center in Westhaven, Conn., which will eliminate about 550 research positions. Bayer remains committed to oncology research and will focus this work at its Berlin offices, Mr. Higgins said in a phone interview.
In the U.S., the company could eventually add jobs at its research center in Berkeley, Calif., where it mostly focuses on biological drugs, Mr. Higgins said. "I think Berkeley will be a growth opportunity for us. If you look at our portfolio at the moment it's perhaps too focused on small molecules. We'd like to strengthen our capability in large molecules," he said. The term "large molecules" refers to biological drugs, while "small molecules" refers to drugs made from chemicals.
Mr. Higgins said Bayer would remain focused on researching prescription drugs for cancer, heart disease and women's health. He said Bayer would give a more complete overview of its R&D strategy in mid June, when it will host a health-care day.
--Gangolf Schrimpf contributed to this article.
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