Dive Brief:
- Pharmaceutical giant Novartis announced plans Tuesday to cut more than 2,500 jobs predominately located in its home country of Switzerland over the next four years as the drugmaker undergoes significant restructuring.
- By 2022, Novartis plans to cut 1,450 manufacturing jobs in several Swiss plants as well as 700 workers mainly located at the company's Basel campus, a company spokesperson said. However, the drugmaker anticipates adding up to 450 new positions in Stein for a cell and gene therapy plant.
- A Novartis manufacturing operation in the U.K. will also enter a "phased exit" for a two-year period, the spokesperson said, with the plant in Grimsby expected to close by the end of 2020, affecting 395 workers. Novartis will look for a buyer for the site before then in an effort to keep it open.
Dive Insight:
First-year chief executive Vas Narasimhan continues a fast-moving restructuring plan with sizable layoffs, as Novartis shifts away from mass-produced products to focus on specialized and personalized medicine.
In the less than eight months since Narasimhan became CEO, Novartis has made some serious changes to sharpen its focus.
In March, the company sold its portion of a consumer healthcare venture to rival GlaxoSmithKline for $13 billion. In June, the drugmaker announced plans to spin out its eye-care unit Alcon. And earlier in September, it slimmed down Sandoz's U.S. division, selling off about 300 products to Aurobindo Pharma for up to $1 billion.
Before Narasimhan took over, Novartis had already announced various job reductions. In May 2017, it announced plans to cut 500 manufacturing and development jobs in Switzerland and 250 U.S. jobs while adding 350 "high-tech manufacturing and scientific" spots over the next year and a half.
In October 2017, a Broomfield, Colorado manufacturing facility was chosen by Novartis for closure, affecting 450 jobs in a consolidation with a Wilson, North Carolina plant.
The 1,450 manufacturing cuts will affect four Swiss plants located in Stein, Basel, Schweizerhalle and Locarno. Novartis said it hopes "to train as many impacted associates as possible to work on the new technology platform" at the cell and gene therapy plant in Stein, which could add up to 450 jobs.
Novartis will eliminate 700 additional positions by 2022 by moving management capabilities from the Basel campus to its five global service centers located in Ireland, India, Malaysia, Mexico and the Czech Republic.
The U.K. plant closing had nothing to do with Brexit, according to a company spokesperson. Instead, the closure will allow Novartis to consolidate its high volume active pharmaceutical ingredient production. Novartis will also consider selling the plant, which could keep it open.
The drugmaker currently employs 12,800 people in Switzerland, and said it expects roughly 10% of its global workforce to continue to be based in the country, focused on advanced manufacturing, R&D and enterprise management.
"Novartis remains deeply committed to Switzerland," Narasimhan said in a statement Tuesday. "We are proud to have our global headquarters, our largest R&D center, and a growing advanced manufacturing footprint in this country."