The plan – announced during Lonza’s results presentation earlier today – will see the firm reduce its headcount by 500 staff with 400 positions being eliminated at the Visp chemicals and biomanufacturing facility.
Lonza said: “The majority [of the job cuts] will consist of internal transfers, early retirements and discontinuation of temporary contracts. Reductions will be partially extended over a period of two years,” adding that the move will deliver productivity improvements of CHF 100m ($107m) by 2015.
The facility has been a problem for the Swiss firm for some time, primarily due to the strength of the Swiss franc and competition.
In August, it appointed Beat In-Albon as COO and handed him responsibility for combatting the ‘Visp challenge,” improving profitability and reducing costs.
At the time Lonza told Outsourcing-pharma.com that this would involve a combination of process optimisation initiatives and a focus on producing higher value, high margin pharmaceutical products. Evidently the other part of the plan involved job cuts.
Speaking earlier today CEO Richard Ridinger said: “We want to assure that Visp remains a long-term competitive and profitable site with attractive work places. We will focus all activities on value creation, by reducing the complexity of the site, improving the cost structure and flexibility.
“This will also include a review of business models and optimization of the portfolio. These measures will help increase profitability and make Visp a competitive site. These critical measures will unfortunately also require a reduction of 400 positions within 24 months.”
The firm also said that: “This productivity improvement program in Visp, Lonza will review its global manufacturing footprint and introduce similar improvement programs to other sites globally.”
Lonza spokesman Dominik Wenrer told Outsourcing-pharma.com it is too early to say if this review will involve other job cuts, explaining that: "We have started the project to analyse our global manufacturing footprint, but it’s too early to speculate on the potential outcome."