Merck Announces Merck Serono Implementation Plans for Its Efficiency Program in Switzerland

Merck Announces Merck Serono Implementation Plans for Its Efficiency
Program in Switzerland

• The planned efficiency measures in Switzerland would include the closure of
Merck Serono's headquarters in Geneva 

• Merck plans workforce reductions across all global operations in Switzerland
and intends to relocate certain Geneva-based functions to existing locations
in Germany, the United States and China 

• Biotech production facilities will continue to be maintained in Aubonne and

• Merck to work closely with affected employees to find socially responsible

Darmstadt, Germany, and Geneva, Switzerland, April  24, 2012 – Merck announced today the efficiency measures it plans to take related to Merck Serono's operations in Switzerland as part of the comprehensive transformation program announced by the company in February. Merck's transformation program is focused on addressing unprecedented market shifts, increasing competition in key product areas and existing inefficiencies in its own organization. 

"The planned measures for Merck Serono's operations in Switzerland are needed to ensure our global competitive position in a rapidly changing market and to secure the long-term future of the company," said Stefan Oschmann, Executive Board Member of Merck and responsible for the Merck Serono division. "Regrettably, these planned measures include the closure of our headquarters in Geneva, which would result in workforce reductions and the redeployment of certain Switzerland-based functions to other Merck locations. We are committed to working  closely with key stakeholders, especially affected employees, to find socially responsible solutions, including exploring potential entrepreneur partnership programs and redeployment proposals."

To eliminate existing duplications of functions resulting from maintaining two European headquarters, Merck Serono intends to consolidate all headquarter functions in one Merck Serono Campus in Darmstadt, Germany. Additionally, the company plans to transfer key research and development positions from Geneva to Darmstadt (Germany), Boston (USA) and Beijing (China) in order to optimally leverage scientific expertise in the biotech hub of Boston and to ensure state-of-the-art clinical development in all key growth markets. As a consequence, out of the 1,250 current positions in Geneva over 750 positions would be transferred. In addition, Merck Serono plans to reduce 500 positions to eliminate duplications and create a leaner, more agile organization. Therefore, it is planned to close the facilities in Geneva.  

Despite these planned measures, Merck Serono will maintain a manufacturing presence in Switzerland and will continue to manufacture biotech products in its stateof-the-art biotech production sites in Aubonne and  Corsier-sur-Vevey (both in the Canton of Vaud). However, Merck also plans to reduce approximately 80 positions across the three production sites in Aubonne, Corsier-sur-Vevey and Coinsins. The division's existing manufacturing operations in Coinsins are planned to be relocated primarily to the Aubonne site. Out of the 750 positions planned to be transferred, Merck
Serono intends to relocate over 130 positions related to technical manufacturing operations from Geneva to the Aubonne area in the Canton of Vaud in order to be close to its manufacturing  ctivities. Merck intends to maintain its Swiss market operations in Zug.

The consultation process with employees will start  on April 25, 2012. During this process, the company will gather and evaluate alternative suggestions made by employees. Merck Serono intends to find socially responsible solutions where possible and collaborate with cantonal stakeholders to identify re-deployment opportunities for affected employees. Currently, the division has approximately 17,000 employees worldwide, with about 1,250 employees located in Geneva. 
In addition, a dedicated team will assist employees and cantonal stakeholders in evaluating possible spin-off and start-up opportunities outside of Merck Serono that could have long-term potential. For that purpose Merck Serono is prepared to commit up to € 30 million in seed funding focused on activities and compounds that are not core to Merck Serono's current and future business objectives. 
Upon completion of the consultation process and review of its results, the company intends to start relocations and reductions of its workforce in the second half of 2012 and aims to fully implement the plan in the first half of 2013.   

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Merck is a global pharmaceutical and chemical company with total revenues of € 10.3 billion in 2011, a history that began in 1668, and a future shaped by  more than 40,000 employees in 67 countries. Its success is characterized by innovations from entrepreneurial employees. Merck's operating activities come under the umbrella of Merck KGaA, in which the Merck family holds an approximately 70% interest and shareholders own the remaining approximately 30%. In 1917 the U.S. subsidiary Merck & Co. was expropriated and has been an independent company ever since.