Merck to cut jobs under new plans

Merck is set to cut jobs under new efficiency plans it aims will reduce costs and exploit new growth opportunities.

The measures are part of the Group’s comprehensive transformation programme which it says is needed to tackle unprecedented market shifts, competition and its own existing inefficiencies.

The number of jobs losses has not yet been decided, but Karl-Ludwig Kley, Merck’s Chairman, says that initial analysis may lead to “workforce reductions across all businesses and regions”.

A consultation process will now be conducted by the Group with employee representatives in different countries to seek solutions where possible.

Mr Kley says the approach reflects the company’s strong tradition it has with its employees at Merck. “We have specifically not published potential figures related to the efficiency programme as we are committed to engaging constructively with the relevant stakeholders to achieve a mutually acceptable solution,” he said.

The Group’s Executive Board plans to focus on all businesses and regions and consists of two phases.

The first phase, carried out in the next two years, plans to establish a new leadership organisation and install cost-cutting measures to develop long-term growth. The implementation of a new leadership committee began at the start of the year with the objective to increase decision making processes.

The second phase aims to exploit new growth opportunities. The company says that initial exploration of areas for future growth based on broader industry and macroeconomic trends has also commenced.

“Over the next two years, Merck needs to address unprecedented market shifts, increasing competition in key product areas and existing inefficiencies in its own organisation to ensure the long-term success of its business model,” said Mr Kley. “We will therefore progress with our planned efficiency program in order to deliver recurring cost reductions and free up resources for investment in promising growth areas.”