Bayer’s new CEO Bill Anderson on Wednesday vowed to “remove multiple layers of management” within the German pharmaceutical giant by the end of 2024 as he outlined plans to split the firm up after declaring that its performance is “not acceptable.”.
Anderson, who took up his position as Bayer CEO in June, said “it goes without saying that we’re not happy with this year’s performance” after the company reported a 66.4% drop in its earnings per share on the back of an 8.3% drop in revenues, to €10.3 billion.
Bayer stock
BAYN,
fell 1% on Wednesday, and the stock has dropped 14% this year. The company’s third-quarter performance was roughly in-line with analysts’ forecasts, compiled by Bayer itself.
The German multinational, which had 101,369 staff on its books in December 2022, saw its pay bill surge to record highs of €12.6 billion last year, as it bolstered its ranks by hiring an extra 1,831 people.
Anderson, however, said the job cut plans are not simply an exercise in “penny pinching” as he instead argued the plans are aimed at shifting Bayer towards an “entirely new way of operating.”
The Bayer CEO noted that “the number of senior leaders has remained the same” throughout a series of six separate cost-cutting programs as he complained that there are “still 12 layers between me and our customers.”
Anderson, who previously served as CEO of California biotech company Genentech and as the head of Roche’s pharmaceutical arm, said the management cuts will see “95% of the decision-making in the organization… shift from managers to the people doing the work.”
The company chief also said Bayer is considering plans to restructure its business, including by splitting the company in three or by spinning off either its consumer health or crop science businesses.
Deutsche Bank analysts, led by Falko Friedrichs, said: “The statements around structural options for the company make it clear that the new CEO Bill Anderson is serious about it and will potentially follow through sooner rather than later, which should also be taken positively.”
Bayer is also continuing to deal with lawsuits from people who claim they developed cancer due to exposure to glyphosate-based products produced by Monsanto, which the German firm acquired for $63 billion in 2018.
Bayer said that of the 165,000 lawsuits served against Monsanto over injuries relating to its glyphosate-based Roundup weed killer, approximately 113,000 have either been settled or are not eligible to go forwards as of October.
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