A Swiss newspaper has suggested Novartis is planning to either cut or relocate around 4,000 jobs as it continues a cost-cutting drive.
This year, Novartis has already announced 500 redundancies in Switzerland – although the company said it would be adding positions elsewhere – and continued to reduce its manufacturing footprint with the planned closure of a New York plant that employs 535 people.
The latest news comes after Novartis reported fourth-quarter earnings under pressure as a result of the loss of patent protection for Diovan (valsartan), its big-selling blood pressure drug, with net profit down 3 per cent to $2.05bn on sales up 2 points to $15.08bn.
Discussing the company’s financial performance last week, Novartis chief executive Joe Jimenez said: “cost containment is here to stay. This is something that started during the financial crisis, and it’s not going away.”
The report in NZZ am Sonntag the latest restructuring would affect up to 6 per cent of Novartis’ pharmaceutical workforce and will once again focus on production sites and administrative staff.
It suggests that a sizeable block of the 500 Swiss jobs affected by Novartis’ earlier announcement would be transferred to a new 8,000-capacity office India and that – overall – the impact on the group’s total headcount would be neutral in 2014.
Last year, Novartis launched a major review of its operations, saying it wanted to achieve cost savings worth 3 to 4 per cent of total sales over the next couple of years.
Jimenez made some positive predictions about the potential of the pharma sector in the coming years, noting that leaders at the World Economic Forum in Davos last week discussed the concept of health as a driver of economic growth.
Close attention by governments on the need for healthcare reforms to improve efficiency can be an opportunity for pharma companies that are prepared to innovate, he added, suggesting that in those terms Novartis is “well-positioned for the future.”