Bayer to Cut at Least 4,500 Jobs
BERLIN (AP) _ Germany’s Bayer AG confirmed Friday that it will slash another 2,700 jobs by 2005, finishing off an abysmal week for the pharmaceutical giant that included the withdrawal of its lucrative anti-cholesterol drug Baycol and a second profit warning in as many months.
News of the layoffs came a day after Bayer said it would cut 1,800 positions and shut 15 plants at its polymers division. The latest round of cutbacks announced Friday will be in its drugs unit, where mounting problems are expected to hammer earnings this year and beyond.
``That’s not even including the possible effects of the withdrawal of Baycol,″ company spokesman Hans Hochberg said, indicating even more possible work force reductions to come.
Some of the job cuts _ which will amount to nearly 4 percent of the 117,000-strong work force _ have already taken place under a reorganization plan designed to save 1.5 billion euros ($1.3 billion) by 2005, Hochberg said.
Bayer’s stock plummeted Wednesday on the news that it was pulling Baycol, its No. 3 selling drug, after it was linked to at least 31 deaths in the United States and nine more in other countries.
The company’s chief executive said it would fight any lawsuits claiming damages.
``We consider such claims absolutely groundless,″ Manfred Schneider said in an interview in Friday’s Sueddeutsche Zeitung daily.
The stock slid further the next day after the company revealed the extent of production problems with its Kogenate blood-clotting treatment and announced a 45 percent drop in second-quarter operating profit.
It also warned full-year profit would fall ``significantly″ below its already lowered 3 billion euro ($2.7 billion) target and said it will overhaul its strategy.
Bayer shares had dropped another 3.1 percent to 35.83 euros ($32.05) by late Friday afternoon in Frankfurt.
Some analysts say the drug unit is too small to survive, and urge Bayer to split it from its polymers, chemicals and agriculture divisions _ advise rejected by CEO Schneider.
``If we’d concentrated on drugs we’d be in an even worse situation,″ he was quoted as saying in the newspaper interview.
``There’s no question that we must rethink fundamentally the approach of our pharmaceutical unit,″ he said. ``But giving up our four-pillar strategy is certainly not the right conclusion.″
He said the company would push ahead with its plan to buy the crop science businesses of French-based pharmaceutical firm Aventis and Schering AG of Germany.
High raw materials prices and slowing demand hurt the polymers division, which makes plastics, rubber and polyurethane products.