Why Sanofi’s Recent Job Cuts Could be Worse

Yesterday, Sanofi issued a press statement titled “Sanofi provides information on the adaption of its activities in France through 2015.” Read past the headline and you quickly realise that the ‘adaption of activities’ involves eliminating around 900 jobs at the company’s sites France by 2015. You can read the statement here.

Job cuts are always a concern and the pharmaceutical industry has seen a large number of redundancies in recent years. According to newspaper reports, Sanofi alone has axed more than 4000 jobs since 2008. However, yesterday’s announcement could have been much worse. According to an article published by Reuters, trade unions had originally estimated that the company could shed up to 2500 jobs. An updated Reuters article explains that the lower-than-expected number could have come about through government pressure on the company to retain as many workers as possible.

The reason for the workforce reduction is to help implement certain strategic objectives by 2015. Sanofi is looking to implement the changes mainly through voluntary measures and the cuts will primarily comprise of early retirements, mobility proposals and repositioning within France. The press statement explicitly states that no relocation of sites or changes to the number of industrial sites is planned in France.

Unfortunately, there may be more to come as Sanofi also adds that the function of its Toulouse site “remains to be specified” and indeed the mention of the site is vague in the press statement. It was reported in July by various sources, including Bloomberg, that Sanofi was planning to close the site. Over the summer, Sanofi says it has identified potential stakeholders who could maintain the site’s scientific or technical capacity, and a working group will soon be created to explore the available options. “Concrete solutions” are hoped for within the coming months.

Sanofi is aiming to achieve three strategic objectives: establish new momentum for success in R&D, improve the economic performance of the industrial units of Sanofi’s vaccine division, Sanofi Pasteur, and streamline support functions.

With regards to R&D activities, Sanofi said in its statement that development activities in Vitry/Alfortville, CHilly-Mazarin/Longjumeau and Lyon will continue in their current configuration, with research in the former two locations being increased. Meanwhile, the company’s Montpellier site will evolve towards a strategic center focused on development, while the site in Strasbourg will maintain its position as a collaborative platform that is open to academic research and biotechnology companies. In Lyon, the company also hopes to create a “center of excellence” in infectious diseases.

Those working for Big Pharma seem to be seeing a constant roll of redundancies. Let’s hope that whatever plan Sanofi finds for its Toulouse site is the best to ensure the minimum loss of jobs.