The German drugmaker has decided to sell few of its brands, divest its animal health business and cut about 12,000 jobs as it fights the pressure of dropping share prices and lawsuits over an alleged cancer-causing effect of Monsanto's Roundup weed killer.
In August, Bayer's shares dropped sharply after a US ruling linking glyphosate to cancer, which Bayer says is safe and is used in Monsanto's Roundup and RangerPro. Further, the two companies, Dr Scholl and Coppertone, acquired by Bayer four years ago are also grappling with falling revenues as US consumers switch to online shops and cheaper brands.
These situations have put Bayer at a position of loss and now it aims to cut costs and regain its performance and agility. The job cuts and the sale will result in costs of more than €4bn.
Chief Executive Officer, Werner Baumann, however, denied the connection of restructuring with glyphosate litigation. But he did agree that layoffs will enhance the company's agility.
“A leaner organization will help us become more responsive to changing markets and increase our agility,” he said.
As the company sells its animal health business (worth up to €7bn) it will now shift its focus on pharmaceuticals, consumer health and crop science.
The loss of business often costs employees their jobs. In major restructuring like these, the workforce suffers and is left helpless to figure out their future career path. But there are many ways in which organizations can help the laid-off employees, from helping them through outplacements to leveraging their own internal network and referring them for jobs. In the wake of job cuts how a company responds and helps its employees transition through the face reflects its culture and values.
Image source:Science News for Students