Merck Serono Announces Final Restructuring Plan - Pharmaceutical Technology

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Merck Serono Announces Final Restructuring Plan

ePT--the Electronic Newsletter of Pharmaceutical Technology

Merck Serono has revealed its “final efficiency program” for operations in Switzerland, which includes confirmation of the closure of sites in Geneva and Coinsins and their associated job cuts.

The restructuring was first announced in February 2012, but in April, in accordance with Swiss law, Swiss-based employees were given the opportunity to provide alternative proposals to avoid the job cuts, to reduce their number or to minimize their impact. The majority of proposals received from employees focused on maintaining all or some of the company’s activities in Geneva, developing a biotechnology cluster in Geneva or were measures relating to the company’s social plan. Several aspects of the received proposals relating to the social plan have been incorporated into the final program, including lowering the minimum age for early retirement from 58 to 56 years of age. In addition, employees who resign before the expected end of their contract will retain the right to part of their severance payment, under certain conditions.

However, Merck explained that it could not retain proposals advocating the maintenance of its activities in Geneva given the need to eliminate existing job-function duplications.

"The restructuring of Merck Serono's activities in Switzerland is part of an extensive program concerning all regions and all businesses of the Merck Group, necessitated by the unprecedented market shifts and the competitive environment facing the Group," Stefan Oschmann, Executive Board Member of Merck and CEO of Merck Serono, said in a press statement. "This restructuring process involves tough measures, but these are essential to safeguard the future of Merck Serono.”

As part of the final efficiency program, the company is also offering to facilitate the creation of start ups from employees using a fund of EUR 30 million ($38 million). Employees who proposed ideas for developing service companies targeting the biopharmaceutical industry are being encouraged to apply for start-up support, which may include capital investment, granting of intellectual property licenses and/or cessation of material assets. Employees can continue to submit project for consideration until 30 September 2012. Several proposals are already at advanced stages of discussion.

The majority of job transfers and cuts as part of the restructuring are expected to be completed by the second half of this year. Closure of the Geneva site is planned for mid-2013 and for 2014 for the Coinsins site.

The restructuring plan includes consolidating all headquarter functions on a Merck Serono campus in Darmstadt, Germany. Out of the 1250 positions currently located in Geneva, roughly 750 will be transferred to other sites and 500 will be eliminated. Approximately 80 positions in the Canton of Vaud will be made redundant while manufacturing operations based in Coinsins will be relocated to Aubonne.

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