On Tuesday, Novartis stated that a previously planned reorganization initiative might result in the loss of 8,000 employees, or approximately 7.4% of its worldwide workforce, including up to 1,400 in Switzerland.
The job cutbacks are a part of a restructuring program the Swiss pharmaceutical giant launched in April with a target savings goal of at least $1 billion by 2024. Previously, Chief Executive Vas Narasimhan had estimated the job layoffs to be in the “single digit thousands”.
In a statement sent through email, Novartis said that implementation of its new organizational structure, which entailed combining its pharmaceuticals and oncology business groups and would eventually result in the elimination of jobs throughout the organization, had gone well.
The declaration backed up an earlier account of the cuts in the Swiss publication Tages Anzeiger.
The firm stated that out of the approximately 8,000 roles affected internationally, 1,400 positions might be affected in Switzerland. It also stated that it now employed 108,000 people worldwide, including 11,600 people in Switzerland.
It stated that as part of the organizational restructuring announced in April, the cost savings would come mostly from eliminating redundant structures as it would no longer operate its oncology and non-oncology medicines businesses independently.
The new structure will be put into place over the upcoming months, according to Novartis.
As the Swiss drug giant enjoys massive cash infusions, including $20.7 billion last year from the sale of its 33 percent stake in Roche back to the Swiss rival and from a potential sale of its Sandoz unit, a producer of affordable generic medications, CEO Narasim is looking to improve his efficiency credentials.
By year’s end, Novartis promised to have finished its evaluation of Sandoz.
Novartis has stated that it will have adequate purchasing power to make acquisitions of businesses and technology to improve its growth prospects, despite intentions to buy back up to $15 billion worth of shares.