With drugs pipeline in focus, Bayer considers job cuts

The savings that Bayer – the inventor of aspirin and maker of Yasmin birth control pills – could make as part of the overhaul would give it financial wiggle room as it competes with larger rivals to buy the right to promising treatments from biotech firms

Bayer is considering job cuts and outsourcing as part of a wide-ranging review of drug research and development that will last until at least November.

The prospect of ‘very tangible changes’ contributed to a decision by key board members to extend the contract of Hartmut Klusik, the 62-year-old head of personnel, which was due to expire at the end of the year. That decision is due to be signed off by the full board in September. The savings that Bayer – the inventor of aspirin and maker of Yasmin birth control pills – could make as part of the overhaul would give it financial wiggle room as it competes with larger rivals to buy the right to promising treatments from biotech firms.

Bayer, which is due to release second-quarter results on Wednesday, is under pressure from investors to make purchases or do licensing deals that they say are needed to ensure the long-term independence of the pharmaceutical division.

But any major external expansion is unlikely until after the review is complete.

A company spokesman declined to comment on Klusik, any potential job cuts or outsourcing. An extension of Klusik’s contract had been in doubt, two sources familiar with the company said. This is because drug production at Bayer’s Leverkusen plant in Germany was found to be substandard by U.S. regulators in February and this fell under his remit.

Bayer has said it launched the R&D review – starting in January when drug development head Joerg Moeller was given additional control over research and discovery in January – to ‘seamlessly steer’ R&D activities.

A new team, reporting directly to Moeller has just been appointed to help map out the new setup.

The review will look at whether drug testing services should be outsourced to cheaper contractors. Labour representatives, who are worried about jobs moving outside the company, are involved in the talks.