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Merck announces Swiss efficiency program, closure of Geneva office

Wednesday, April 25, 2012

Global pharmaceutical and chemical company Merck Serono has announced efficiency plans for its Swiss operations as part of its comprehensive transformation program—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.

The efficiency plan includes the closure of Merck’s headquarters in Geneva, which will results 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,” said Oschmann.

The closure will eliminate duplications of functions resulting from maintaining two European headquarters, and instead consolidate all headquarter functions in one Merck Serono campus in Darmstadt, Germany. Additionally, the company plans to transfer key R&D positions from Geneva to Darmstadt, Boston and Beijing 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 will be transferred. In addition, Merck Serono plans to reduce 500 positions to eliminate duplications and create a leaner, more agile organization.

Despite these planned measures, Merck Serono will maintain a manufacturing presence in Switzerland and will continue to manufacture biotech products in its 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 activities. Merck intends to maintain its Swiss market operations in Zug.

However, a 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 says it intends to find socially responsible solutions where possible and collaborate with cantonal stakeholders to identify re-deployment opportunities for affected employees.

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 $39 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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