As part of a global overhaul that will cut 12,000 jobs, Bayer is consolidating its corporate functions—and it's starting by shutting down operations in Robinson, Pennsylvania, near Pittsburgh.
The shutdown means 569 employees and 96 contractors will be cut over the next two years, Bayer said in a statement Tuesday. The jobs are primarily administrative support roles in areas such as IT, accounting, legal and compliance that support Bayer’s U.S. businesses, Chris Loder, a company spokesperson, told FiercePharma.
“We will transition the site closing in a thoughtful, orderly manner over a two-year period to provide ample time for employees and operations to transition smoothly and to ensure that we continue to serve our customers and businesses effectively,” the company said, adding that it’s exploring options to transition some key work currently performed at the site.
Bayer recognizes “the important role the site has played in our company’s history.” Indeed, Bayer’s top U.S. executives were based from the Robinson site for years, until the company stationed its newly appointed U.S. head Philip Blake in Whippany, New Jersey, in 2012. A year after that, Whippany also became Bayer HealthCare’s new U.S. headquarters.
It's not the first time the Robinson site has witnessed a Bayer restructuring. In 2015, Bayer spun off its Material Science business into a separate firm called Covestro, and the Robinson site has since then been the new firm's North American headquarters, right next to the remaining Bayer operation.
As for the Pittsburgh area, Bayer still retains about 1,300 employees who work out of sites in Indianola, Saxonburg and O’Hara for the radiology business within its pharma division, Loder told FiercePharma.
The decision to close the Robinson site comes as Bayer aims to strengthen its “core life science businesses” through a huge restructuring announced in November. Hoping to enhance its productivity, the company said it will slash 12,000 jobs by 2021. Among them, 900 jobs are coming from pharma R&D as Bayer looks to use the savings for external R&D investment. Around 5,500 to 6,000 in the corporate functions, business services and country platforms will also have to go, Bayer said at the time, and the current Robinson plan will count toward that number.
In addition, the German chemical and drug manufacturer will hive off its animal health business, get rid of part of its consumer health franchise—along with 1,100 jobs in the sector—and squeeze out 4,100 crop science positions as it integrates its newly acquired Monsanto operations.
Bayer initiated the overhaul amid investor concerns that the animal health franchise is pulling back its stock valuation. In addition, the gigantic Monsanto acquisition also means it doesn’t have enough resources to grow an unexciting pharma pipeline.