Pharma Giant Bayer AG Slashes 1500 Headcount Facing Decreased Sales

The job cut affected primarily the management vertical, coinciding with a slight sales decline and a revised full-year earnings forecast.

Germany-based Bayer AG, in its Q1 2024 financial report, revealed a workforce reduction of approximately 1500 people.

The workforce reduction affected primarily the management, coinciding with a slight sales decline and a revised full-year earnings forecast.

Talking about it, Bill Anderson, CEO, Bayers, disclosed that about two-thirds of the job cuts impacted the company’s pharmaceuticals, crop science, and consumer health sectors.

“Our senior leadership circle is already considerably smaller than it was a year ago,” Anderson noted, underscoring the strategic downsizing aimed at achieving the company’s target of €500 million ($540 million) in sustainable cost savings by 2024 and €2 billion ($2.16 billion) by 2026.

The announcement comes after Bayer reported over $14.86 billion in sales, a 4.3% decline compared to the same quarter in the previous year.

However, the year-over-year sales reduction was a mere 0.6% when adjusted for currency and portfolio changes.

Bayer’s Financials

In contrast, Bayer’s pharmaceutical division was the only one to witness an increase in Q1 sales. It witnessed a near 4% surge in sales, surpassing $4 billion on an adjusted basis.

This growth is largely attributed to the significant gains of its new products, Nubeqa (darolutamide) for certain prostate cancers, and Kerendia (finerenone) for chronic kidney disease in Type 2 diabetes patients.

Since taking over as Bayer’s CEO in June 2023, Bill Anderson has been guiding the company away from the repercussions of its $66 billion Monsanto acquisition in 2016.

As of March 2024, Bayer has significantly reduced its executive team to eight members, a substantial decrease from the previous 14. The pharmaceutical industry at large is grappling with similar issues.

Bayer’s Latest Developments

Established in 1863 by Friedrich Bayer and Johann Friedrich Weskott, Bayer is a global company specializing in healthcare and nutrition. It aims to address challenges posed by a growing and aging population.

Recently, Bayer Pharma acquired a 25% stake, it didn't already own, in its joint venture with Ahmedabad-based Zydus Lifesciences for INR 282.2 Cr ($33.8 million)

With this, the 50:50 JV Bayer Zydus Pharma Ltd, created in 2011 for the sales and marketing of pharmaceutical products in India has finally reached completion. Bayer acquired full ownership of the entity, as per pre-agreed JV terms.

Last month, Bayer and Google Cloud joined hands to advance the integration of AI into healthcare imaging processes. This partnership sought to enhance the capabilities of radiologists and improve patient outcomes by developing innovative AI-powered applications.

Per the partnership, Bayer will continue to leverage its decades-long radiological research and innovation expertise to transform data into impactful insights to benefit patients.

Days back, Bayer and Evotechave joined forces to develop innovative precision treatments for cardiovascular diseases (CVDs). The collaboration aims to identify and validate novel targets for treating cardiovascular diseases.

Further, the partnership seeks to tackle the pervasive challenges of CVDs and address the pressing medical needs within cardiovascular health.