Novartis Plans Staff Reductions in Manufacturing and Business Support Services

Novartis has announced staff reductions in manufacturing and business services operations in Switzerland and manufacturing in the UK.  

The company explained the rationale for the changes and the staff reductions planned. “In a continuation of the manufacturing strategy initiated in 2015, Novartis intends to further adapt its manufacturing network to the changing product portfolio with fewer high-volume products and an increased focus on specialized and personalized innovative medicines,” Novartis said in a statement. “This has led to a shift in investment strategy from more traditional production technologies to more advanced manufacturing platforms. In addition, the creation of an integrated manufacturing organization continues to create synergies.”

 The company had previously announced adjustments in its manufacturing units in Japan, the US, and other countries. For Switzerland, where Novartis maintains a significant manufacturing hub, the company reports that a net reduction of approximately 1,000 positions in Basel, Schweizerhalle, Stein and Locarno is intended until 2022. This takes into account the recently announced build-up of a cell and gene-therapy manufacturing unit, which potentially brings up to 450 new positions to Stein.

Additionally, Novartis expects a reduction of up to potentially 700 positions until 2022 in Novartis Business Services, a shared services organization of business support services, mostly from its Basel campus. In 2014, Novartis created the business services organization with a strategy to support the company in becoming more efficient. As an enabler of this strategy, Novartis built five global service centers in Dublin (Ireland), Hyderabad (India), Kuala Lumpur (Malaysia), Mexico City (Mexico), and Prague (Czech Republic) to deliver services at lower costs. “In a continuation of this strategy, and in addition to the continued shift of transactional activities, Novartis intends to start to move management capabilities to the service centers as well,” Novartis said in its statement. “The primary drivers for this intention are the benefits that standardization, simplification, and a sound global services location strategy bring over time.”

The company says it has already invited its employee representatives and management in Switzerland for dialogue and consultation. The company says it plans to offer full support to all associates who might be impacted, including a job center, internal and external re-employment as well as a social plan and early retirement plans. In the context of the recently announced investment in cell and gene-therapy manufacturing unit in Stein, Novartis says it aims to train as many impacted associates as possible to work on the new technology platform.

Novartis notes that it continues to invest in new technology platforms and research and development while consolidating senior global leadership roles in Switzerland. Over the last five years, the company has invested more than $1 billion in new manufacturing technologies in Switzerland. Examples include a flow through chemistry platform in Schweizerhalle, the build-up of a continuous manufacturing plant in Basel, the cell and gene-therapy unit in Stein, a device-assembly building, and a new launch facility in Stein. “Novartis is also open to opportunities to maximize the potential of the Schweizerhalle site, leveraging collaborations with external partners to further develop its unique environment, and create an attractive and sustainable chemistry and life-sciences park,” the company said in its statement. Novartis previously reported that that the company created from the spin-off of Alcon, its eye-care division, will be headquartered in Geneva and listed on the Swiss Stock Exchange.

Taking the impact of the intended restructuring and the spin-off of Alcon into account, Novartis expects Switzerland to remain host to approximately 10% of its global workforce while the Swiss market contributes less than 2% to the company’s overall sales. With the intended changes implemented, Novartis says it expects to employ in 2022 around the same amount of people in Switzerland as it did in 2008, with the vast majority occupying global roles in high-end manufacturing, R&D, and business management.

In the UK, production at Novartis’ site in Grimsby, UK, is anticipated to end by the fourth quarter of 2020. If no buyer for the site is found, Novartis says the site will be closed, impacting 395 associates. “Novartis has made the difficult decision to propose exiting from the manufacturing operation at Grimsby,” Novartis said in its statement. “This is due to the need to consolidate its high- volume API [active pharmaceutical ingredient] production. This will be a phased exit extending over a two-year period. During this time, options including divestment, which could potentially allow the facility to stay open, will be carefully considered by Novartis.”

Source: Novartis

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