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Takeda announces workforce reductions of 2,800
OSAKA, Japan—Despite cautious optimism and some growth within the sector, the industry took another hit this week as Takeda Pharmaceutical Co. Ltd. announced that it will be letting go of 2,800 employees by 2015, representing about 9 percent of the company's workforce. The layoffs are part of the company's efforts to align its workforce globally and consolidate its site operations as it continues to integrate the recently acquired Nycomed's operations into its own following the recent acquisition. The strategic measures are also intended to help strengthen Takeda's presence in more than 70 countries and to help it adapt to current market conditions in keeping with its 2011-2013 Mid-Range Plan.
Takeda will be consolidating several of its sites, including possible mergers or liquidation of subsidiaries in Europe and also a reduction of its U.S. workforce. The company plans to layoff approximately 2,100 workers mainly in Europe and 700 in the United States by the end of 2015 across its research and development, commercial, operations and G&A functions. The necessary cost of the plan is estimated at approximately Yen 70 billion (approximately $912 million) during fiscal years 2011-2015. The financial impact of the plan in fiscal 2011 ending March 2012 is predicted at a Yen 35-billion (approximately $456 million) decline in income, with an updated financial forecast to be disclosed with Takeda's Q3 2011 earnings on Feb. 1, 2012.
As a result of the consolidations and layoffs, Takeda expects cost synergies of approximately Yen 200 billion (approximately $2.6 billion). While the forecasted cost synergies in Europe for fiscal 2014 were estimated at Yen 30 billion (approximately $390.1 million) in May 2011, they are now forecast at about Yen 40 billion (approximately $521 million).
The announcement follows the Nycomed acquisition, which cost Takeda $12 billion and expanded its commercial presence to include oncology, gastroenterology, central nervous system diseases, metabolic diseases, inflammatory and immune disorders, pain management, respiratory diseases and cardiovascular health. These measures are intended to support the company 's overall strategy and also bring further efficiencies to sustain Takeda's medium- and long-term growth targets as of fiscal 2015. Nycomed's former operations will be aligned with Takeda's global Japanese headquarters as well as the newly defined organizations of the Chief Commercial Officer, headquartered in Zurich, Switzerland, and the Chief Medical and Scientific Officer, headquartered in Deerfield, Ill., and its affiliate network worldwide.
"The combination of Takeda and Nycomed, which we acquired on Sept. 30, 2011, brought together Takeda's strong presence in the Japanese and U.S. markets with the legacy Nycomed business infrastructure in Europe and high-growth emerging markets," Yasuchika Hasegawa, President & CEO of Takeda, said in a press release. "While our combined operations in more than 70 countries are more complementary than overlapping, there are a number of areas where we will need to make changes to ensure efficient and flexible operations moving forward."
The company's research and development sites will be consolidated in an effort to support both its marketed products and the development and registration of new projects throughout Takeda's newly expanded commercial footprint.
SOURCE: Takeda Pharmaceutical Co. Ltd. press release