Pharma Job Cuts Cause Anxiety for European Governments - Pharmaceutical Technology

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PharmTech Europe

Pharma Job Cuts Cause Anxiety for European Governments
With downsizing occurring more frequently than ever within the pharmaceutical industry, is Europe doing enough to curb further job losses that could threaten the recovery of its economy?




The UK is not the only country where national politicians have found themselves under pressure as a result of pharmaceutical industry job cuts; elsewhere, major company decisions have been challenged as well. In Switzerland, Novartis’ decision, announced in 2012, to cut 1080 jobs despite recording net sales of $56.7 billion caused considerable controversy in the media (8). At that time, Joe Jimenez, CEO of Novartis, claimed that the tough economic environment made it impossible for the company to deal with pricing pressures and yet maintain the current level of employment. However, a hint that the company would be open to new ideas prompted intense behind-the-scenes negotiations between Novartis, the unions and local government, which then resulted in the avoidance of job cuts. The main site that was set to suffer was Novartis’ facility at Nyon; however, a mixture of concessions from the workers coupled with favourable tax offerings from local government saved the site. For example, the redevelopment work taking place at Nyon would now be treated as a new project from a tax perspective, hence reducing some of the costs involved. Furthermore, a proportion of Novartis’ land was set to be reclassified as residential rather than commercial thereby increasing its value.

Novartis has a long history in Switzerland and is generally viewed with pride by the country’s citizens. The initial announcement regarding job cuts at Nyon was criticised in the popular media as being the result of “American influence” within the Swiss company’s boardroom—an accusation that the company strongly rejected. While Novartis may still cut several jobs at other Swiss sites in the future, for now, its reputation in Switzerland has been restored among the public (8).

The manner in which the local government and other local parties were able to respond to the Novartis situation in Switzerland is a sharp contrast to what took place in the UK. In 2011, Novartis announced a plan for job cuts at its Horsham site (9).

As with the Pfizer situation in Sandwich, local politicians reacted negatively to the news, but seemed unable to influence the decision. Novartis has stated that it will maintain some jobs at Horsham, but it is still committed to considerable job cuts at the site (10).

France has been experiencing a similar situation to what occurred in Switzerland due to Sanofi reorganising its global operations. In July 2012, the national newspaper Le Figaro reported that up to 2 000 jobs might be cut in France as part of the company’s drive to reduce its workforce (11). Sanofi also quoted unions who expected a higher figure of job cuts. Between 2009 and 2011, the company had already cut 4 000 jobs, but would not clearly state how many jobs might go in its next round of cuts. The French government reacted quickly, as it was already facing considerable public criticism for being unable to kickstart the economy and also due to imminent job cuts in the automotive sector. It held behind-the-scenes discussions with Sanofi, which led to the company announcing that there would be fewer job cuts and a commitment to maintaining its existing sites in France (12).

Despite this outcome, there are still concerns in France, particularly from the unions, that the initial number of job losses will still take place at a later time. The main Sanofi site under threat is located in Toulouse and workers have been holding regular protests in the hope of prompting a reconsideration. The government has said it is still seeking guarantees from Sanofi and that detailed proposals for different options are still under discussion (13). The Wall Street Journal reported that a government-sponsored report was due at the end of April 2013 (14).


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