Bayer cutbacks start to be felt with 1,500 jobs shed in Q1

Bayer’s first-quarter results update shows that its workforce has declined by more than 1,500 full-time equivalent (FTE) employees since the end of last year, suggesting reductions promised by chief executive Bill Anderson are starting to take hold.

The total headcount at the group was a little over 99,700 at the end of last year and fell to around 98,200 by the end of March, according to Bayer’s financial statements. However the total number of positions shed is expected to rise significantly in the coming quarters.

Last November, Anderson launched a “re-design” of Bayer that will see layers of management stripped out and a significant reduction in employee numbers, although the company hasn’t revealed how many jobs are likely to go during the process.

The reduction comes as Bayer reported a slight decline in group first-quarter sales to €13.77 billion ($14.85 billion), although the pharma division fared better with a near-4% gain to €4.36 billion that it said was driven by new prostate cancer drug Nubeqa (darolutamide) and Kerendia (finerenone) for chronic kidney disease (CKD) and diabetes.

Nubeqa sales were up 59% to €283 million – setting it on course for blockbuster status this year – while Kerendia rose 64% to €85 million. Their performance helped to offset the decline for Bayer’s top-selling anticoagulant drug Xarelto (rivaroxaban) and ophthalmology drug Eylea (aflibercept) – both in the final years of patent protection – which fell almost 2% to €926 million and €782 million, respectively.

Crop science also saw a decline in revenues but according to Bayer outperformed its peers in the category, and the company reported a better-than-expected operating loss – which had been expected due to restructuring charges.

“In March, I highlighted four areas we’re focused on to get Bayer back on track,” said Anderson this morning, referring to growth and innovation, resolving ongoing litigation in the US, improving cash generation and reducing debt, and implementing the new Dynamic Shared Ownership (DSO) operating model – which aims to reduce around a dozen layers of management between the CEO and the group’s customers to just five or six.

“Two months later, we’ve made progress in each one,” he added. “We’re consolidating roles, designing teams for more impact, and taking out layers.”

He stressed, however, that the most important measure of success will be “much greater than a job number or a cost savings target. It will be in our ability to innovate, grow our businesses, and improve life for our customers.”