Up to 2,000 Evonik workers worldwide will be laid off as the German chemicals company and contract drug manufacturer looks to cut costs.
Over the last few months, the company has been “extensively” analyzing its operations, culminating in a move to a new operating structure that’s projected to be up and running by the end of 2026, it said in a press release. The multiyear reorganization program is dubbed “Evonik Tailor Made.”
A key aspect of the redesign is aimed at trimming administrative roles that “do not directly support” Evonik’s operating business. The new “tailor made” company will have a maximum of six layers of staffers beneath the executive board.
The bulk of the 2,000 layoffs will come from the management ranks, Evonik said. Some 1,500 of the job cuts will be in the company’s home country of Germany.
All of this is designed to cut costs to the tune of around 400 million euros annually by 2026.
Evonik recently reported a 17% drop in full-year sales. In 2023, the company generated 15.2 billion euros, while 2022 saw a total haul of 18.4 billion euros, according to the recent financial report.
The decline is not the result of “cyclical fluctuations,” but instead can be chalked up to “massive, consequential changes of our economic environment,” CEO Christian Kullmann said in Evonik’s release. "We are addressing this challenge with the 'Evonik Tailor Made' program which will change our organizational structure for good."
Evonik's healthcare arm offers CDMO services ranging from early development to commercial manufacturing, according to its website. The company also works with medical device manufacturers.
In recent years, Evonik has opened a new lipid manufacturing plant in Hanau, Germany, and announced plans to build another in Lafayette, Indiana.