Merck KGaA lines up 1,100 German jobs for the ax

Merck KGaA is spreading the job-cutting pain to its home country. The company plans to slash 1,100 jobs from its German payroll by 2015, or about one-tenth of its workforce there. Some manufacturing operations will be discontinued, but Merck has agreed with labor leaders to cut most of the jobs in a "socially acceptable manner," through early retirements and voluntary-resignation deals.

The job cuts are part of a company-wide restructuring that Merck announced in February, after the failure of a key multiple sclerosis drug candidate. Until now, its biggest moves were in Switzerland, targeting sites acquired when it bought the biotech company Serono in 2006. Merck is in the process of shutting down Merck Serono's Geneva headquarters, where about 1,200 people now work, to consolidate the drug operations at its own Darmstadt HQ.

The new round includes some of the usual suspects for restructuring, including support functions such as logistics and financial services. The company says it's avoiding outsourcing except for some activities that are already transitioning to contractors. Those moves will claim 100 jobs.

It's also pledging to keep its financial services operations in Germany, rather than moving them abroad--at least for now. The group will "leverage efficiencies" to hit cost-savings targets; if that's not successful by the end of 2015, Merck may reconsider a move.

The employees who remain on the shrunken payroll won't escape the pain completely. Merck plans to save more money by reducing "personnel costs" through "a restructuring of the compensation system."

About the only thing growing at Merck in Germany will be its building footprint. The company pledges to invest 250 million euros ($314 million) into expanding the Darmstadt headquarters and developing a "state-of-the-art" production and research center there.

- read the statement from Merck