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Big Cuts at Bayer

So the Bayer/Monsanto deal has gone through, and its sequel is exactly what you think it is: job cuts. About 10% of the company’s global work force is being let go. As some readers may know, I’ve already experienced the joys of losing a job as a result of a big Bayer move (in my case, the merger/takeover with Schering AG some years ago), so I know just what a lot of people are experiencing.

I’ve seen the letter that Bayer sent out to its employees, and it’s pretty much what you’d expect. “Embrace change“, “strengthen our core businesses“, competitive global environment“, “new opportunities“, and “significantly enhance productivity and profitability” all make appearances in the first few sentences, and anyone who didn’t just fall off the turnip truck knows that when you get a letter from upper management with those sorts of phrases in it that it’s going to be a bad day at the office.

The main thing is that company will now be Pharma, Consumer Products, and Crop Science, which means that things like Animal Health are being sold off. It also means that about 4100 jobs will be cut in Crop Sciences, and about 900 in worldwide Pharma R&D. Additionally, the company had built a plant to produce Factor VIII for hemophilia in Wuppertal (in addition to one already in Berkeley), but they’re going to completely eat that (no doubt expensive) German facility with the loss of another 350 jobs. The company says that further cuts are coming from 2022 onwards in R&D, in both the US and Germany, net about 200 jobs lost (500 cut, 300 added). And up to 6,000 jobs are being cut in various corporate functions, business services, and so on.

This would seem to mean that a significant number of the total job losses will be in Germany, which I suppose is a measure of how seriously the company is about all this. Cutting positions under German labor laws is not the work of a moment, which as you would imagine was a factor that had occurred to all of us working in Bayer’s US R&D back in the day. From what I understand, the company is still rolling out more details to its worldwide employees, and I wish people luck as they find out what’s to become of them. . .

28 comments on “Big Cuts at Bayer”

  1. Bagnar says:

    How Syngenta will react based on these news ?

  2. Otto says:

    As a former Bayer US R&D scientist, I recall the post-Schering cuts, including the closures of the major Bayer and Berlex research centers in Connecticut and California. It was a painful experience, especially for long-time staff who were older and farther along in their careers. Despite the misguided shutdowns, many of the Bayer R&D colleagues found ways to support each other by referring jobs to one another, setting up email lists to stay in touch, and pulling together in other ways. That collegiality made a real difference in the lives and prospects of many people, including me. I hope that those impacted today will support each other similarly.

  3. Hap says:

    1) How does cutting so many people in one of your core businesses (crop science) strengthen it? Cutting ancillary businesses (if you can’t get cash for them) makes sense, but if you’ve decided that a business is key to your future (and at least part of what you wanted in buying it is size), why does whacking it make sense?
    2) These letters have a “1984” feel to them – the phrases seem so obviously untrue that their only purpose seems to be the power in making employees pretend to believe phrases that no one believes, the corporate version of “Who’s your daddy?”.

    1. Bill says:

      Hap, it’s short term boosterism at the cost of long term growth. Those making the decisions will be rewarded, usually with stock price increases, but when the SHTF, they’ll be long gone. The company I left has lost about 20% of their engineering at all levels, not counting layoffs, because of impending weasel work like this. The CEO sent out a letter recently saying all their changes weren’t working because the employees “weren’t working hard enough”.

      1. Anon says:

        QFT. But – the business guys are just doing what they need to to be successful, but businessmen are rewarded for short term stock gains, not long-term (and high risk) investment, which leaves us makers out in the cold, when we’re usually not making anything that’s going to turn into a product, and when it does, returns will be years down the line. And very qualified people are willing to do the same job for much less. Capitalism!

  4. William Murray says:

    “Embrace change“, “strengthen our core businesses“, competitive global environment“, “new opportunities“, and “significantly enhance productivity and profitability”

    Weaselspeak BINGO!

    I’m sorry to hear about all those that are losing their jobs and wish them well. Maybe they can figure out what they’d rather do?

    1. Hap says:

      Problem is, most of the options involve getting paid a lot less, and not many of them involve doing what you actually want. If there were lots of good or even decent jobs, then layoffs wouldn’t provoke such anger (that, and the uneven distribution of rewards and responsibility).

      1. eugene says:

        I thought unemployment was at record lows in Trump’s economy and consumer optimism and positive outlook on life was at a local (on the historical timeline) high or going higher and the inflection point on the slope hasn’t been hit yet. Or is it just for blue collar workers? Certainly I think I saw more jobs advertised for organic chemists on a site linked to in the chemjobber blog this year than last year. I was checking only out of curiosity though, after my friends kept telling me that Trump is doing a good job back in the US with the economy, and I decided to grudgingly accept that. However, maybe this is not the case with high tech workers.

        1. Hap says:

          I don’t know – the economy has been continuing along (other than last quarter?) at a similar pace to the last few years, but wages have not really increased. Chemjobber had a tweet stream from someone else discussing the lack of options for the laid-off GM workers, for example: https://twitter.com/lydiadepillis/status/1068532371182546944 I don’t think a lot of this is on Trump – it was happening in Obama’s time, and W’s – but I suspect the people that want him also want this wage structure. I don’t think that this bodes well for technical fields, since other countries are more willing to support education and have cheaper wage structures (for the moment).

  5. David says:

    My understanding is that in order to get the merger with Monsanto be approved they had to give up some of their crop science business – the site here in the Triangle is being sold to BASF, I think it was. Folk are either moving to St. Louis or leaving.

  6. mark says:

    It is conceivable that the 120K employees are, through their 401K like instruments or through stock that they hold, the largest shareholders of the company. there are only 980 million shares outstanding. if every employee even holds even 750 shares of Bayer stock which would represent 9% of outstanding shares– far more than the combined top ten institutional holders or management insiders. Why is it they (or others that have been in this situation) don’t exercise their strength as owners if they don’t like what is going on?

    1. Anon says:

      Capitalism!

    2. Dionysius Rex says:

      With a market cap of ca. €60bn, that is then round about €500,000 per employee. Can‘t see that employee-shareholder action would amount to more than 5% of total shares outstanding…not going to work. Ever.

    3. nowhere man says:

      Most 401k plans are probably set up such that the participants don’t vote their shares, the plan administrators do. Guess who picks the plan administrators? At least this is how thinks work with the employers I have had.

    4. Ted says:

      I worked at a biotech that underwent a dirty, underhanded buyout (by Lilly). Despite the fact that Institutional Shareholder Services came out against the deal (twice!) and despite the fact that most employees voted their shares against the deal (board members were calling long time employees up to the night before the vote), the buyout still cleared with 77% support.

      https://en.wikipedia.org/wiki/Icos#Acquisition_by_Eli_Lilly

      I never learned whether Bill voted his shares against it. I’m pretty sure Rathmann did.

      -t

  7. JB says:

    Are they closing the entire Wuppertal plant or just the biologics plant? The small molecule production plant was impressive. They also have a lot of research up the hill outside the city.

  8. Ted says:

    Tough news. My last stop in pharma was with a Lanxess division (née Bayer) called Saltigo. Saltigo went back and forth between profitability in the ag. and pharma divisions. When I joined, ag was down and pharma was carrying them, so they established a remote US PI/PII manufacturing site. Five years later, ag was up, so pharma was cut back – our site was just a drop in the bucket of discarded bathwater.

    I appreciate that the company was relatively transparent about the reasons (“we currently make ~200k €/annum/ag employee but only ~60k €/annum/pharma employee”) but still found their strategic sensibility short-sighted. The Leverkusen facilities (shared with Bayer) were quite amazing – it’s a shame to imagine even more of them shuttered. Best wishes to all affected.

    -t

  9. drsnowboard says:

    I remember an AZ presentation where they used the expression ‘global footprint’ . We all knew what it meant but the AZ lifers had no clue.
    Good luck to the displaced.

  10. Omar Commin Yo' says:

    I recently went through a big layoff as well. What I will say is that people show their true colors during times of struggle. To all those impacted by this, there will be (generally speaking) three types of people: some that step up and are supportive, and others that are vicious and go into survival mode, and some that disappear like a stale fart. Trust me, it will surprise you who falls into which bin! Surround yourself with the ones that step up, and rest assured there is light at the end of the tunnel.

  11. elie tabet says:

    How much of that is because of the lawsuit they lost with roundup? And the avalanche that will cause. I am NOT defending Bayer.

    1. Hap says:

      Wouldn’t Bayer have had some idea that that was going on when they chose to buy Monsanto? If you know you might have a problem, then you factor around it, or get out. If they intend to make crop science one of their key businesses, they must believe that such suits aren’t a general risk to that field, and so cutting resources from it (rather than something else) to pay for the suit doesn’t completely make sense.

  12. EntropyGain says:

    So remind me again why so many if us keep going back to Pharma jobs when there are so many openings in smaller companies? If we stop taking those jobs and stop selling them our drugs, biotechs will eat their lunch.

    1. steve says:

      EntropyGain – Exactly. Large pharma nowadays are just marketing companies. Biotech is where the action is. But rather than join one why not start one? Become an entrepreneur, take charge of your life.

      1. JB says:

        This is why I moved to the government a long time ago after getting laid off in pharma and haven’t looked back. We make OK money on the GS scale with the 28% extra cost of living adjustment, I get a pension, and TSP gets pretty good return for very low cost. I should be able to retire at 58. Getting laid off in pharma left a very bad taste in my mouth, and I knew I never wanted to deal with the instability ever again.

  13. werner says:

    This is really sad and most of all it paints a very bad picture about their leadership.
    From what I hear, Bayer has a truly bad scientific culture. Very low level science, but not due to the scientists (they are about the same level as anywhere), but due to very unfortunate selection of scientific leaders, that act without any scientific vision and purely process-driven. If something would make sense, then a complete replacement of all >VS4.1. with some that understand how to lead a scientific organisation. Anyone with deeper insights into the way Bayer does its research?

    Feeling very sorry for the scientists and their technicians, which will likely suffer the most.

    1. Dionysius Rex says:

      Sadly true, and it seems that they can’t even lay people off properly, as the announced headcount cut at Wuppertal has today (Thursday 6th December) increased from 350 to 750.

      Anyone any idea if this includes research positions in Aprath?

      1. Klaus says:

        Things even worse in Berlin as it seems. They shut down entire departments without showing options where to move the people. Who cares…. Many tears & very sad for everyone! Former head of research Karl Ziegelbauer is the one who screwed things up – as always: he’s even promoted to become head of external innovation and digital technologies despite being a complete digital prick. Joerg Moeller and all the other males of same intellectual level (low), Bayer research in deep problems. Need to replace complete R&D management team or they are screwed completely.

        1. “Der Rat der Stadt Wuppertal steht an der Seite der Arbeitnehmerinnen und Arbeitnehmer. Der Fortfall von 400 Arbeitsplätzen in der Forschung und 350 in der Produktion trifft aber nicht nur die von dieser Entscheidung unmittelbar Betroffenen hart, sondern hat zugleich auch noch nicht absehbare Konsequenzen für die gesamtwirtschaftliche Entwicklung unserer Stadt.”

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