Bayer AG revealed its financial results for the first quarter of 2024, which included a cut of the workforce by around 1500 people, most of which were in the management, together with the slight sales drop and the new earnings forecast for the full year.
During a media call on Tuesday morning, CEO Bill Anderson stated, “Approximately two-thirds of these were management jobs,” referring to the job cuts that have affected the company’s pharmaceuticals, crop science, and consumer health sectors.
“Our senior leadership circle is already considerably smaller than it was a year ago,” Anderson further remarked, emphasizing that the downsizing is a strategic move to achieve the company’s goal of €500 million ($540 million) in sustainable cost savings by 2024 and €2 billion ($2.16 billion) by 2026.
The announcement comes after Bayer reported over $14.86 billion in sales, a 4.3% decline compared to the same quarter in the previous year. However, the year-over-year sales reduction was a mere 0.6% when adjusted for currency and portfolio changes.
Notably, the pharmaceutical division was the only one to witness an increase in Q1 sales.
{{/usCountry}}Notably, the pharmaceutical division was the only one to witness an increase in Q1 sales.
{{/usCountry}}Bayer's pharma sector experiences a growth spurt
Bayer’s pharmaceutical sector saw a near 4% rise in sales, exceeding $4 billion on an adjusted basis. This success is largely attributed to the “significant gains” of its newer products, Nubeqa (darolutamide), used for certain prostate cancers, and Kerendia (finerenone), for chronic kidney disease in type 2 diabetes patients.
Sales of Nubeqa soared by 59%, reaching close to $306 million, while Kerendia experienced a 63.5% surge, amassing $56 million in the first quarter.
Despite a minor drop in revenue, Bayer’s leading products, the anticoagulant Xarelto (rivaroxaban) and the eye medication Eylea (aflibercept), continued to be the top earners, generating roughly $1 billion and $844 million, respectively.
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Looking forward, Bayer has adjusted its earnings-per-share (EPS) projection for 2024 to a range of $5.19 to $5.62, down from the previously forecasted $5.35 to $5.78. This revision is primarily due to the “negative impact from anticipated currency effects,” as stated by the company.
Since assuming leadership at Bayer in June 2023, Anderson has been steering the company away from the fallout of its $66 billion Monsanto acquisition in 2016.
In January 2024, Anderson presented a new operational model, which was designed to improve the efficiency and reduce bureaucracy within Bayer. The plan, which is called Dynamic Shared Ownership, is a broad restructuring that covers the workforce cuts that will be implemented for the next ten years from 2025.
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Since March 2024, Bayer has significantly cut its executive team to eight members, a sharp decrease from the previous count of 14.
The pharmaceutical field, in general, is also dealing with such problems. An instance is the recent case of Bristol Myers Squibb, which announced its plan to cut $1 or any other company that made a similar move. 5 billion is the number of dollars in the costs that will be cut by 2025, which means the loss of about 2,200 jobs.