Call it Sanofi arm-twisting Phase II. Having bullied Sanofi into reducing its planned cuts in France by about 1,000, a French economic development official is whaling at the company again, saying the company needs to concede even more, and Sanofi says it might.
Rumors had suggested that Sanofi ($SNY) might cut as many as 2,300 positions from a variety of facilities in the country. When the news came out this week, it had backed off its original job-cutting target, in favor of a 900-job reduction via voluntary exits, early retirements and transfers over the next few years. Another 600 positions remain at risk since the company said it had yet to decide the future of its Toulouse R&D facility.
The most vocal Sanofi government critic, French Industry Minister Arnaud Montebourg, has repeatedly said a company that makes as much money as Sanofi has no right to be cutting its workforce there so deeply. At one point a couple of weeks ago he seemed to soften his position, but today he said he remains unsatisfied, Reuters reports. "Trade unions are right to say this is too much," Reuters says Montebourg told BFM television. "The government thinks this is too much and we want guarantees for Toulouse."
The original plan was for the company to shave its French workforce of 28,000 by 5% to 7%, in an effort to save some €2 billion ($2.6 billion) annually. Sanofi has said the cuts are necessary in the wake of big patent losses, and it's not the only Big Pharma company to cut jobs repeatedly for that very reason. Sanofi's latest earnings announcement was a testament to the ills it faces; net income fell about 10%, largely because of competition for the blockbuster blood thinner Plavix.
The company told Reuters this week that it had found potential stakeholders to maintain operations at the site in Toulouse and that it would strive to find "concrete solutions" in coming months. Details of the plan are to go to worker groups next week.
- read the Reuters story
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