The German company is struggling to convince investors that its $62.5bn (€55bn) mega-merger with Monsanto was the correct move, after a number of lawsuits were lodged regarding the health risks of glyphosate-based weedkillers acquired in the deal.
The share price of the company is down by a third from August of this year, when the lawsuits were revealed, dropping from €96 to €65 per share, at present.
To stem this slide, the firm has announced measures that it plans to enact in 2019 to concentrate on its core life science businesses. This will see it divests its Animal Health business, sell Coppertone and Dr. Scholl’s Consumer Health brands, and exit its 60% interest in Currenta, a chemicals business.
It is also prepared to take a significant loss within its haemophilia business, where it will abandon its factor VIII facility in Wuppertal, Germany. In 2014, Bayer announced a significant investment in production expansion at the facility, where the firm produces the replacement protein used for the treatment of patients with haemophilia A.
In a statement, the company explained that “the introduction of a number of new products has led to a significant increase in competition. To remain competitive in this segment, Bayer has decided not to utilize the factor VIII facility it has built in Wuppertal.”
As a result of the decision, the company will have to take on impairments and write-offs of around €600m. It will also see 350 positions lost at the facility, with production transferred to its facility in Berkeley, US.
However, this is only a fraction of the total number of roles that will be axed as part of the restructure, with the company downsizing staff numbers by approximately 12,000 worldwide by the end of 2021, close to 10% of its total workforce.
The majority of these positions will be cut from ‘Corporate Functions’, with 5,500 to 6,000 lost in the area, and from its Crop Science division, which will lose 4,100 positions. In total, across its Pharmaceuticals business, headcount will be reduced by 900 from R&D and its Wuppertal facility decision.
“We are aware of the gravity of these decisions for our employees. As in the past, we will implement the planned measures in a fair and responsible way,” said Werner Baumann, chairman of Bayer in a statement.