Merck KGaA to Reduce 10% of its German Workforce

Merck KGaA hasannounced plans to eliminate 1100 jobs in its German facilities by the end of 2015 — almost 10% of the company’s 10,900 German positions. Positions will be reduced through voluntary resignation and early retirement programs across all divisions and functions. The company added that it will refrain from making forced redundancies until the end of 2017, with the exception of possible site closures and transfers that are currently under assessment.

The headcount reduction is being undertaken to ensure that the company remains competitive in the long term. The reduction is part of the company’s “Fit for 2018” program, which calls for production to be focused on core activities that generate high value. More than 100 individual initiatives will be implemented across the different businesses and functions. No outsourcing activities are planned to replace the eliminated positions, with the exception of functions that are already outsourced, such as routine jobs and manual labor.

Targeted areas

Affected areas expected to experience job cuts are support functions, logistics, and the compensation system. For now, Merck explained that it will refrain from moving its financial services, Merck Shared Services Europe GmbH, abroad until at least the end of 2015. In addition, the production of industrial salts in Lehrte and filling operations in Hohenbrunn will be discontinued. Approximately 140 employees currently work at the two sites, and Merck will consider various scenarios in the months ahead.

Merck also revealed plans to invest at least 250 million Euros at its German sites during the next two years. In particular, the Darmstadt site, the global headquarters of Merck, will be expanded and developed into a state-of-the-art production and research center.

The measures are part of the company’s global efficiency program, which was announced in February 2012. Earlier job cuts were announced in April when a press statement detailed plans for the closure of sites in Switzerland, including the company’s sites in Geneva and Coinsins.

Encouraging innovation

As part of the efficiency program, Merck also launched an Entrepreneur Partnership Program earlier this year to facilitate the creation of start-up companies from employees. The first company launched through the program was Prexton Therapeutics, announced in July. The company will employ Merck Serono scientists to continue work around the R&D portfolio in the field of Parkinson’s disease.

Earlier this week, a second company called Quartz Bio waslaunched through the program. The company will provide biomarker data management and exploratory biomarker analysis services for the pharmaceutical industry.