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Productivity drive could affect up to 4,000 Novartis jobs in 2014

By Dan Stanton+

03-Feb-2014
Last updated on 04-Feb-2014 at 16:36 GMT

Novartis has confirmed that pharma jobs will be reallocated in 2014 in a continuation of the productivity drive that saved the firm $2.8bn (EUR2bn) last year.  

Swiss newspaper NZZ am Sonntag  reported that Novartis was looking to cut or transfer up to 4,000 jobs – approximately 6% of its global workforce - earlier this week.

Novartis spokeswoman Anja von Treskow told us the firm “intends to free up, prioritize and reallocate resources primarily in the pharmaceutical area,” adding it needs to increase its “flexibility, and be faster and more effective.”

She added: “This is part of our normal business operations and reflects our need to respond to a dynamically changing healthcare environment.”

Von Treskow did not confirm the exact number of jobs that would be affected, but did tell us the firm expects an equal number of jobs to be created, as are reduced, keeping the overall headcount relatively flat in 2014.

$2.8bn Productivity Drive and closure of 20 sites

The comments come following a year of cutbacks at the Big Pharma firm, culminating in January’s announced closure of the Suffern, New York facility. In November, an R&D restructure saw 443 jobs go at a Horsham, UK facility and in May it was announced 300 jobs were to go at its Lincoln, US OTC facility.

Speaking last week to discuss the firm’s end-of –year figures, CEO Joseph Jimenez said about $2.8bn (€2.1bn) had been saved as part of a productivity drive (though approximately half of this was achieved through procurement).

“From a manufacturing footprint standpoint,” he continued (see transcript here ), “we have either announced closure or exited 20 manufacturing sites” in the last few years. “We are kicking in additional productivity in order to make sure that we grow bottom line ahead of top line.”

Revenue was up 2% to $57.9bn for the full year 2013 across all units, though net profit dropped fractionally to $12.5bn.

India

Further signs of this productivity drive have been high-lighted by the firm in plans to consolidate its operations in Hyderabad, India. Currently the firm has three sites in Hyderabad for pharmaceuticals, Vaccines & Diagnostics and OTCs.

According to von Treskow, a new business services centre is “expected to open in late 2015 or early 2016,” bringing together operations currently spread across the three sites.

“We expect this new business services center to strengthen the Novartis culture of continuous improvement and contribute to greater value for its associates, businesses and stakeholders.”

Novartis currently employs approximately 2,300 people in Hyderabad, and the firm says it expects this number to grow over time.

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