Business with Glyphosate - Bayer has cut 3200 jobs since the beginning of the year
Chemical and pharmaceutical conglomerate Bayer is making progress in its restructuring efforts. "We have 3,200 fewer positions in the company than at the beginning of the year," said Bayer CEO Bill Anderson in Leverkusen. "And we've assembled 900 teams working on our most important tasks." The number of Bayer's employees worldwide decreased to 96,600 by mid-year, with a quarter to a fifth of them being in Germany. The company did not communicate the number of jobs cut in Germany.
Anderson, who has been at the helm of the traditional company for over a year, is facing pressure due to glyphosate lawsuits in the USA, expired patents of medications, and other developments. The stock price is low, and revenue decreased by 2.1% to 24.9 billion euros in the first half of the year. Without currency effects, there is a 1% increase.
The adjusted earnings before interest, taxes, and amortization (EBITA) decreased by 6.8% to 6.5 billion euros in the first half of the year, with a 16.5% decrease in the second quarter.
The net loss in the second quarter was 34 million euros, compared to a loss of nearly 1.9 billion euros last year. Last year, a billion-dollar write-off was necessary due to sluggish glyphosate business. This was not the case in the current quarter, but restructuring costs were high.
Business results were mixed: While the agriculture division faced difficulties, new medications provided a boost in the pharmaceutical sector, offsetting revenue losses from the best-selling blood thinner Xarelto.
The company reaffirmed its corporate forecast for the full year 2024. "We are on track to achieve our goals," said the CEO.
More autonomy for employees
American Anderson, who succeeded the unsuccessful Werner Baumann as Bayer's leader, aims to put the company on track through a profound restructuring. He believes that the company was too hierarchically structured and had inefficient workflows when he took office.
There were up to 12 levels between him as CEO and the customer, which he criticized, and then presented a new work structure where employees are encouraged to think more entrepreneurially and act more autonomously. They should have less reporting to their superiors and instead make decisions to speed up workflows in the company. This results in fewer managers as supervisors, with around 2,500 of the total 3,200 jobs cut in the first half of the year being managerial positions.
Fewer bosses, more doers
"In the old system, we had managers managing three, five, or seven people," Anderson explains his most significant project in his still short tenure. "Now, we usually have managers managing 12, 15, or even 20 people." Their management function is limited, focusing more on administration and career coaching.
The actual work is now done by other employees who come together in changing teams and are close to the customer. "In the old system, we had marketing people and production people all stuck in their respective silos," says Anderson. "In the new system, these people are all together and they come together in teams around the customer."
Cost reduction in focus
In addition to improving workflows, the new company structure also aims to reduce costs for the highly indebted company. Costs are expected to be reduced by two billion euros by 2026, with a 500 million euro reduction expected this year. "We are on track for both targets, and the transformation is progressing faster than I thought," says Anderson.
The number of additional jobs to be cut is still undetermined, with no specific target figure. However, CEO Anderson has made it clear that the restructuring process will proceed swiftly.
Anderson mentioned the presence of pressure due to glyphosate lawsuits in the USA, which is affecting Bayer, and highlighted the decrease in the number of managerial positions as part of the company's restructuring efforts to become more cost-effective and improve workflows, stating, "Around 2,500 of the total 3,200 jobs cut in the first half of the year were managerial positions." Later, Anderson discussed the new structure that encourages employees to think more entrepreneurially and act more autonomously, stating, "There were up to 12 levels between him as CEO and the customer, which he criticized, and then presented a new work structure where employees are encouraged to think more entrepreneurially and act more autonomously."
