A key French official has done an about-face on Sanofi's job cuts. After criticizing the company's cutback plans when they were announced in July, Minister of Productive Recovery Arnaud Montebourg, now says Sanofi ($SNY) "has the right to reorganize"--and to cut up to 2,500 jobs, provided unions sign onto the plan.
Sanofi's plan to retrench in its home country met fierce opposition when first announced in early July. At the time, Montebourg balked, pointing out that the company posted a 5 billion euro profit last year. Speaking Sunday on the French broadcast program Capital, he treated those profits as a prerequisite for Sanofi's freedom to decide its own fate.
"When a company makes 5 billion in profits ... it has the right to reorganize," he said. "You will negotiate with the unions, and we will ensure that this is the case," Montebourg went on to say (as quoted by Le Figaro). Otherwise, the government may just re-examine Sanofi's reorganization, he added.
Since Sanofi reaffirmed its restructuring plans in early July, workers have staged public protests, and union officials repeatedly lamented the planned cuts in the press. Even now, as the official numbers await announcement next week, labor leaders are planning strikes.
The company aims to shave its French workforce of 28,000 by 5% to 7%, as part of a plan to save some 2 billion euros ($2.6 billion) annually. Sanofi has said the cuts are necessary in the wake of big patent losses, and it's not the only Big Pharma to cut jobs repeatedly for that very reason. Perhaps Sanofi's latest earnings announcement helped demonstrate the patent-cliff facts to Montebourg; net income fell by about 10%, largely because of competition for the blockbuster blood thinner Plavix.
- read the news in Le Figaro
- see the PMLive story
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