Roche details Operational Excellence Program looking to savings of $1.84 in 2011, slashng 4,800 jobs

Swiss drug major Roche (SIX: ROG) this morning set out details of its previously-announced Operational Excellence Program (The Pharma Letter September 6), which aims to strengthen innovation and ensure sustained success in a fast changing market environment, expecting to generate savings of about 1.8 billion Swiss francs ($1.84 billion) in 2011, with projected savings of about 2.4 billion francs from 2012 onwards.

The implementation plans include reducing the work force by 4,800 positions worldwide, or 6% of the group’s current work force, over the next two years. The largest reductions are planned in sales and marketing and in manufacturing. Approximately 800 jobs would be transferred to other Roche sites and 700 positions outsourced to third parties. Combination of planned job reductions and transfers affect 6,300 positions overall.

Commenting on the Operational Excellence Program, Roche chief executive Severin Schwan said: “This is a comprehensive, focused initiative to reinforce Roche’s long-term innovation capability in the face of increased price pressures and a more challenging market environment. We will continue to drive our highly promising product pipeline to help seriously ill patients and contribute to more efficient healthcare systems.” Mr Schwan added: “These measures are necessary to ensure sustained success of the company. We will make every effort to find socially responsible solutions for the employees affected.”