Bayer to cut 12,000 jobs after Mon­santo takeover

The Gulf Today - Business - - FRONT PAGE -

BER­LIN: Ger­man chem­i­cal and phar­ma­ceu­ti­cal gi­ant Bayer said on Thurs­day it would slash 12,000 jobs in a ma­jor re­struc­tur­ing fol­low­ing the mam­moth takeover of Mon­santo, en­abling it to save 2.6 bil­lion euros ($3 bil­lion) a year from 2022.

The planned job cuts will af­fect about one in ev­ery ten of the group’s 118,200 posts, “a sig­nif­i­cant num­ber of them in Ger­many”, said the group in a state­ment.

Bayer swal­lowed Mon­santo in one of Ger­many’s big­gest ever cor­po­rate takeovers at a cost of 63 bil­lion euros in June.

But barely two months later, a court rul­ing in the US left Bayer with multi-mil­lion-dol­lar dam­ages to pay as the judge found that its newly ac­quired sub­sidiary Mon­santo should have warned a user about can­cer risks from its her­bi­cide Roundup.

An­nounc­ing de­tails of the re­struc­tur­ing, Bayer said it planned to exit its animal health busi­ness, in or­der to con­cen­trate re­sources on its core busi­nesses of phar­ma­ceu­ti­cals, con­sumer health and crop sci­ence.

It is also look­ing at let­ting go of its Cop­per­tone sun care brand and Dr. Scholl’s foot care product line.

Fol­low­ing the tie-up with Mon­santo, the group’s crop sci­ence di­vi­sion will be among the hardest hit by the job cuts, with 4,100 posts to go.

The company said it ex­pected to com­plete trim­ming its head­count by the end of 2021.

“Th­ese changes are nec­es­sary and lay the foun­da­tion for Bayer to en­hance its per­for­mance and agility. With th­ese mea­sures, we aim to take full ad­van­tage of the growth po­ten­tial for our busi­nesses,” said Werner Bau­mann, Bayer board chair­man.

In­vestors gave a muted re­sponse to Bayer’s an­nounce­ment, with shares in the group down 0.73 per cent to 63.76 euros at around 1445 GMT, un­der­per­form­ing the DAX which was up 0.37 per cent.

In­vestors have been ner­vously watch­ing the group since the can­cer rul­ing in the US over Mon­santo’s lead­ing product Roundup, which con­tains glyphosate.

Chem­i­cal cam­paign­ers and politi­cians in the US and Europe ar­gue that glyphosate causes can­cer, although Bayer points to sci­en­tific stud­ies find­ing no con­nec­tion.

In Oc­to­ber, a San Fran­cisco judge up­held a jury ver­dict that found Mon­santo li­able for not warn­ing a groundskeeper that its weed killer product Roundup might cause can­cer, but slashed the dam­ages award to $78 mil­lion from the ini­tial $289 mil­lion.

By the end of last month, the US sub­sidiary was fac­ing 9,300 cases over glyphosate.

But Bau­mann had stuck to its con­fi­dent out­look in in­te­grat­ing Mon­santo.

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