Roche/BM To Shed Up To 5,000 Jobs

Swiss drugs major Roche is to shed between 4,000 and 5,000 jobs out of atotal workforce of 74,000 worldwide over a two-to-three year period as a result of its $11 billion takeover of the Corange Group, which owns German drug producer Boehringer Mannheim (Marketletters passim).

The group anticipates synergies of about 1 billion Swiss francs ($692.3 million) per year, coming from increased sales, divestment of products and production plants, the streamlining of production and major reductions in both costs and workforce. Roche says that with BM, it will cut jobs in a "socially responsible" way, mainly through natural wastage, while drug industry analysts expect the main cuts to be made in BM's drug division. Integration is expected to improve Roche's position in the drug market with sustained productivity in both organizations.

New R&D Structure The pharmaceuticals division of the group will remain in Basel and will have five R&D centers; Basel, Welwyn, Nutley, Palo Alto and Kamakura. Roche says that a number of promising new drug developments underway in Mannheim and Monza in Italy will be integrated into its existing R&D setup. Staff will be shed at the two sites but will be offered work at existing centers.