Sector News

Novartis’ global revamp to cost thousands of jobs for simpler structures: report

April 16, 2022
Life sciences

Because its goal is to have better efficiency through leaner structures, the company’s new initiative will “inevitably lead to roles being impacted,” Novartis said in a statement.
Novartis is undertaking a huge restructuring to simplify its organization, and some of its employees will feel the pain.

The company will cut thousands of jobs worldwide as part of a revamp unveiled last week, Swiss newspaper Tages-Anzeiger reports based on anonymous company sources, according to Reuters. As of the end of 2021, Novartis housed over 104,300 full-time equivalent employees.

Because the goal is to have better efficiency through leaner structures, the new initiative will “inevitably lead to roles being impacted,” a Novartis spokesperson said in a statement to Fierce Pharma. The company wouldn’t confirm whether “thousands” being impacted is in the right ballpark, saying it’s too early to give specific numbers.

Novartis rolled out the restructuring last Monday. The aim is to save at least $1 billion a year by 2024. The new structure is expected to be fully operational by the end of 2022, the spokesperson said.

Under the plan, Novartis is combining the pharmaceutical and oncology business units and is also integrating technical and customer support functions into one operations department. It’s carving out some responsibilities from the commercial and R&D teams to create a new strategy and growth function focused on optimizing the company’s pipeline.

During a presentation, Novartis CEO Vas Narasimhan noted that the company’s non-product-related expenses as a percentage of sales have remained stable over the past few years at around 29%. Among a group of 15 large pharma companies, Novartis ranked 12th for that spend percentage.

Before the reorg, Novartis’ commercial activities were managed under separate pharma and oncology organizations. They each had their own president and global marketing functions, including separations by different countries. Now, the company is dividing the commercial team into two, for the U.S. and, separately, the international market, and will have fewer layers and redundancies.

As of year-end 2021, Novartis had 41,280 employees working in sales and marketing, nearly 12,800 in operations and 4,727 in general and administration. Based on Novartis’ plan, those areas are likely where the job cuts will hit the most.

By Angus Liu

Source: fiercepharma.com

comments closed

Related News

January 29, 2023

Colorcon, Inc. signs Put agreement with intent to acquire controlled atmosphere packaging specialist Airnov Healthcare Packaging

Life sciences

Airnov provides critical healthcare industries with high-quality, controlled atmosphere packaging, to protect their products from moisture and oxygen. The business has manufacturing facilities in the USA, France, China and India and employs around 700 people.

January 29, 2023

Takeda pledges up to $1.13B for rights to Hutchmed’s cancer drug fruquintinib outside of China

Life sciences

Takeda of Japan has partnered with Hong Kong-based Hutchmed, gaining the commercial rights to colorectal cancer drug fruquintinib outside of China for $400 million up front, plus $730 million in potential milestone payments. Takeda also will help develop fruquintinib, which can be applied to subtypes of refractory metastatic colorectal cancer, regardless of biomarker status, the companies said.

January 29, 2023

Vir taps Bayer dealmaker Marianne De Backer as its next CEO

Life sciences

On April 3, Scangos, who’s been chief executive officer at Vir since the start of 2017, will hand over the reins to Marianne De Backer, Ph.D. De Backer comes over from Bayer, where she currently heads up pharmaceutical strategy, business development and licensing. Alongside her CEO appointment, De Backer is set to join Vir’s board of directors, the company said Wednesday.

How can we help you?

We're easy to reach