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May 19, 2017

Novartis Axes 500 HQ Jobs, Adds 350 "High-Tech" Positions

  • Novartis said it will eliminate 500 jobs at its headquarters in Basel, Switzerland, over the next 18 months—during which the pharma giant also plans to add 350 “high-tech” Swiss-based jobs.

    The jobs to be eliminated include “traditional manufacturing, coordination, and development operations positions,” while the high-tech positions would consist of manufacturing and scientific jobs, “mostly in the areas of development and innovative biologics manufacturing,” Novartis said in a statement to GEN and other news outlets.

    The Swiss union Unia told the Swiss Broadcasting Corp. that the jobs to be lost consisted of 162 positions in production, 109 in development, 117 in pharmaceutical management, and 105 in finance, recruitment, IT, sales, and infrastructure.

    “Novartis has started the dialog and consultation with its employee representatives in Switzerland,” the company stated. “It will offer full support to all impacted associates ranging from providing services through a job center to maximizing internal and external re-employment, offering social plan conditions, as well as early and voluntary retirement plans.”

    The production positions are being cut as part of a planned shutdown of production facilities at its Basel headquarters campus and at Schweizerhalle in canton Basel. Part of those jobs will be transferred to India, Swiss Broadcasting Corp. reported.

    Novartis employs 13,000 people in Switzerland, part of its global workforce of 118,000 in 155 countries.

    The Swiss job cuts mark Novartis’ third workforce reduction in less than a year. They reflect an “ongoing transition to an integrated operating model” designed to advance innovation, quality, and efficiency worldwide, the company said.

    In August 2016, Novartis eliminated its Cell & Gene Therapies Unit by integrating its operations into the broader organization, affecting 120 positions. Two months later, the company said it was shutting down R&D units based in Schlieren, Switzerland, as well as Shanghai, and Singapore, in a cost-cutting restructuring that consolidated research into hubs based in Basel and Cambridge, MA.

    Novartis carried out its latest job restructuring nearly a month after reporting a 17% year-over-year decline in first-quarter net income, to $1.665 billion, on net sales that fell 1%, to $11.539 billion.

    The company blamed the net-income decline on a charge related to its acute heart failure drug serelaxin (RLX030), which failed a Phase III trial in March, and a 5% drop in “core” operating income due to generic competition and increased spending, mainly on its Alcon eye care unit and on the heart failure combination therapy Entresto® (sacubitril/valsartan).

    The spending on Entresto paid off, Novartis added, by generating $84 million in sales during Q1, nearly five times the $17 million made in the year-ago quarter, due to increased use of the drug in the U.S. and additional launches in Europe, Novartis added.

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