When companies announce a big reorg, what's the natural follow-up question? Layoffs. But after rolling out news of its management shuffle on Wednesday, Sanofi said job cuts won't be part of the new picture.
The company may be squeezing its operations into three new business units--leaving vaccines and animal health intact--but that doesn't mean it's shedding jobs, a Sanofi ($SNY) spokesman told the French newspaper Les Echos. The reorg "contains no downsizing," the spokesman said.
Sanofi management also assured European officials that the new structure won't affect employment. The company has nearly 110,000 employees worldwide, including 27,000 in France, where previous job-cut proposals were met with vociferous opposition from unions and government officials alike.
The French Democratic Confederation of Labor (CFDT), a national trade union, was skeptical, however. The union believes that French R&D operations and overall support functions could be targeted for cuts. Downsizing in France could be tough, however, as previous CEO Chris Viehbacher discovered; amid pressure from unions and officials, Viehbacher trimmed his job cut plans in France by more than half in 2012.
The reorganization does mean making the company more efficient in other ways. As Leerink Partners analyst Seamus Fernandez pointed out, the new structure is similar to the three-unit set-up at Pfizer ($PFE), which divvied up its operations beginning last January. "This is simplifying," Fernandez told the Boston Globe. "I think it's very sensible, and it brings more efficiency to the organization."
Its chief aim, Sanofi says, is setting the company up for new drug launches coming down the pike. That includes the PCSK9 cholesterol med Praluent, due for an FDA decision next month; that drug will be part of Sanofi's new Diabetes & Cardiovascular unit when the reorg takes effect at the beginning of 2016.
The changes will also mean growth in Boston as Genzyme becomes Sanofi Genzyme, adding immunology and cancer to its purview in addition to rare disease meds and multiple sclerosis. The new unit will be tasked with several potential new launches, including two immunology meds: the rheumatoid arthritis fighter sarilumab and the atopic dermatitis treatment dupilumab, which partner Regeneron ($REGN) calls their "next big one after Praluent." Genzyme CEO David Meeker, who will head up the new Sanofi Genzyme unit, told the Globe that "adding exciting products to specialty care" will lead to "significant growth."
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