The Leverkusen-based pharmaceutical and agrochemical group Bayer is planning a major restructuring process. By the end of the year, the Group intends to reduce several management levels, which will lead to a significant reduction in the workforce. This step is considered necessary due to the current business performance (rp-online: 09.11.23).
Major restructuring of the Bayer Group: CEO unveils plans for structural changes in March
Chief Executive Officer Bill Anderson said during the presentation of the quarterly results that the company is thoroughly reviewing its structural options. The exact details of this restructuring will be announced by the Board in March next year. However, Anderson stressed that the company’s performance so far this year has not been satisfactory, as it has not generated positive cash flow despite a turnover of almost 50 billion euros.
Cash flow, an important financial indicator for Bayer, describes the company’s ability to self-finance and liquidity. It is based on deposits and withdrawals within a certain period of time.
Bayer Plans Radical Group Restructuring: What Can Employees Expect?
Anderson ruled out splitting the group into pharmaceuticals (with prescription and over-the-counter drugs) and agrochemicals. Instead, there could be a separation from over-the-counter drugs such as aspirin and Bepanthen, or from agrochemicals, including the seed business. Analysts and investors expect these structural changes to boost the share price.
The new corporate structure will be leaner, with fewer hierarchical levels between management and customers. However, the Executive Board has not yet announced the exact number of management levels that will be eliminated and the impact on the workforce.
Bayer Revolutionizes Corporate Structure: Focus on Agile Teams and Financial Challenges
In order to increase efficiency, agile teams with more decision-making freedom and self-organization are to be set up in the future. These teams will take care of customers and products directly, with 95 percent of decision-making power to be shifted to employees.
Although sales remained stable in the third quarter, earnings declined due to billions of euros in write-downs in the Crop Science agrochemicals division caused by higher capital market interest rates. During the year, sales fell by 3.2 percent to 35.78 billion euros. Special charges, especially at Crop Science, totaling 7.2 billion euros, led to a net loss of 4.28 billion euros. Bayer continues to face lawsuits for damages in connection with the weed killer glyphosate. Despite some court defeats, the company emphasizes the safety of the product.
Originally published by Germany’s “Blackout News”.