Leverkusen, Germany -- Bayer AG said 18 Nov that its aim is to invest its resources even more systematically in growing the company and enhancing its innovative capability. But an integral part of this plan will see the group saving Euro 800 million annually by cutting 2000 jobs.
Bayer's incoming chairman Dr Marijn Dekkers announced the move, explaining: "To finance the expansion of our growth activities, we therefore need to redirect resources, improve efficiencies and cut costs."
In future, the focus will be on researching, developing and marketing new products, "particularly in HealthCare and CropScience," Bayer said, and on expanding activities in the emerging markets.
This will require high investment, said Bayer, pointing out that at the same time, sales and earnings are under pressure from generic products, rising development costs and the effects of healthcare reforms.
Annual cost savings of Euro 800 million, planned to start in 2013, will see half of this amount reinvested. By the end of 2012 Bayer is likely to incur a one-off charges of about Euro 1000 million -- part of this already being incurred in the fourth quarter 2010.
Bayer's global headcount of 108 700 will be cut about 2000 by 2012, made up of the elimination of 4500 positions -- including roughly 1700 in Germany - and the creation of some 2500 new jobs in the same period, particularly in the emerging markets.
"Bayer has great business potential in all three subgroups. To better exploit this potential, we must continue to bundle existing resources and streamline our structures. That is the only way we can sustainably finance our investment in growth and innovation - for example in new pharmaceutical products, in our BioScience business and in the expansion of our capacities in Asia," said Dekkers.
"The cutbacks involved will not be easy, but they are necessary. I am convinced that with more innovation and less administration, Bayer can become a better and faster company."