Takeda announces workforce reductions of 2,800
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.
OSAKA, Japan—Despite cautious optimism and some growthwithin the sector, the industry took another hit this week as TakedaPharmaceutical Co. Ltd. announced that it will be letting go of 2,800 employeesby 2015, representing about 9 percent of the company's workforce. The layoffsare part of the company's efforts to align its workforce globally andconsolidate its site operations as it continues to integrate the recently acquired Nycomed'soperations into its own following the recent acquisition. The strategicmeasures are also intended to help strengthen Takeda's presence in more than 70countries and to help it adapt to current market conditions in keeping with its2011-2013 Mid-Range Plan.
Takeda will be consolidating several of its sites, includingpossible mergers or liquidation of subsidiaries in Europe and also a reductionof its U.S. workforce. The company plans to layoff approximately 2,100 workersmainly in Europe and 700 in the United States by the end of 2015 across itsresearch and development, commercial, operations and G&A functions. Thenecessary cost of the plan is estimated at approximately Yen 70 billion(approximately $912 million) during fiscal years 2011-2015. The financialimpact of the plan in fiscal 2011 ending March 2012 is predicted at a Yen35-billion (approximately $456 million) decline in income, with an updatedfinancial forecast to be disclosed with Takeda's Q3 2011 earnings on Feb. 1,2012.
As a result of the consolidations and layoffs, Takeda expectscost synergies of approximately Yen 200 billion (approximately $2.6 billion).While the forecasted cost synergies in Europe for fiscal 2014 were estimated atYen 30 billion (approximately $390.1 million) in May 2011, they are nowforecast at about Yen 40 billion (approximately $521 million).
The announcement follows the Nycomed acquisition, which costTakeda $12 billion and expanded its commercial presence to include oncology,gastroenterology, central nervous system diseases, metabolic diseases, inflammatoryand immune disorders, pain management, respiratory diseases and cardiovascularhealth. These measures are intended to support the company's overall strategyand also bring further efficiencies to sustain Takeda's medium- and long-termgrowth targets as of fiscal 2015. Nycomed's former operations will be alignedwith Takeda's global Japanese headquarters as well as the newly definedorganizations of the Chief Commercial Officer, headquartered in Zurich,Switzerland, and the Chief Medical and Scientific Officer, headquartered inDeerfield, Ill., and its affiliate network worldwide.
"The combination of Takeda and Nycomed, which we acquired onSept. 30, 2011, brought together Takeda's strong presence in the Japanese andU.S. markets with the legacy Nycomed business infrastructure in Europe andhigh-growth emerging markets," Yasuchika Hasegawa, President & CEO ofTakeda, said in a press release. "While our combined operations in more than 70countries are more complementary than overlapping, there are a number of areaswhere we will need to make changes to ensure efficient and flexible operationsmoving forward."
The company's research and development sites will beconsolidated in an effort to support both its marketed products and thedevelopment and registration of new projects throughout Takeda's newly expandedcommercial footprint.
SOURCE: Takeda Pharmaceutical Co. Ltd. press release