- Jobs to be cut over 3 years, mostly through early retirement
- Sanofi meeting trade union representatives in France this week
Sanofi told its labor unions that it plans to cut 600 jobs in its home country over three years, as France’s biggest company by market value seeks to trim costs.
The departures will be voluntary, and mostly through early retirement, according to a statement from Paris-based Sanofi on Tuesday. The drugmaker, which employs a quarter of its staff, or 27,000 people, in France, said the cuts won’t have any impact on research and development operations. The proposed reductions also don’t apply to the Merial animal-health unit, which is being given to Boehringer Ingelheim GmbH in exchange for consumer-health operations.
A total of 296 research and development positions that were to be filled in France will be eliminated, Thierry Bodin, a Sanofi union representative, said in a phone interview earlier on Tuesday following meetings with executives from Sanofi. That’s in addition to the 600 planned reductions.
Of the 600 job cuts, more than 100 are corporate jobs, affecting central and support functions, and 155 positions are in the company’s commercial operations division, Bodin said.
Chief Executive Officer Olivier Brandicourt, who took over in April, is slimming down a company that is the product of dozens of acquisitions. Sanofi’s diabetes business, its largest, is facing pricing pressures in the U.S. and generic competition to its best-seller, the Lantus insulin. The CEO pledged in November to slash costs by 1.5 billion euros ($1.6 billion) to help sustain earnings growth through 2020. The drugmaker also is reviewing options for its European generic business.
Sanofi has more than 110,000 employees in 100 countries, according to its website. Job cuts also will take place outside France, the company has said. Sanofi is likely to provide more details on the planned cuts on Feb. 9, when it presents 2015 earnings.
While Sanofi is much less efficient than almost all of its biggest competitors, as measured by sales per 1,000 employees, reducing headcount in France may be a challenge for Brandicourt. A plan by his predecessor, Chris Viehbacher, to cut research jobs in Toulouse and Montpellier in 2012 drew condemnation from then-Industry Minister Arnaud Montebourg, who said it was “abusive” because Sanofi had earned 8.8 billion euros in profit the previous year.
In its last major round of headcount reduction, over 2012 and 2013, Sanofi eliminated 1,455 research jobs in the U.S. and in European countries including Germany, Italy and Hungary. It cut more than 900 other positions in France.