Bayer gets down to business
Bayer is getting down to business: As part of the new organisational model that CEO Bill Anderson, who has been in office since June 2023, has prescribed for the Group, there will be massive job cuts. The Group management has agreed on this with employee representatives. The extent of the planned job cuts is still unclear. However, the "significant job cuts" announced by the Leverkusen-based company leave plenty of room for imagination.
This is by no means the first time that Bayer has cut jobs since the takeover of Monsanto. This time, however, many things are different. This is because Anderson is not implementing a classic savings programme but is actually intervening in structures and functions. Middle management, in particular, will be disproportionately affected by the job cuts. Entire departments are likely to be wiped out.
Bait laid out
As a result, employees who lose their jobs will find it challenging to find alternatives within the Group. And those who don't get up to speed quickly will be threatened with redundancy at the end of 2026. Of course, this is just a threat, but one that the employee representatives have accepted nolens volens.
They were apparently "lured" by the promise that the Group and its three divisions would be preserved. The existing One Bayer structure offers the greatest opportunity to secure the future of the employees. This is the only reason why the Supervisory Board's employee representatives are supporting the chosen path.
No applause
However, the announcement fell flat with investors, for whom efficiency programmes are usually a reason to cheer. There was no more than a slight bounce in the share price in the morning. Subsequently, the downward trend accelerated, although Bayer shares lost around 30% of their value in 2023 alone. This is partly due to the fact that no figures were given on the expected savings from the efficiency programme or the associated costs. As the job cuts are to be accelerated, high severance payments are likely to be on the cards, at least initially.
On the other hand, hopes are fading that Anderson will actually tackle the demerger of the Group demanded by investors. Anderson had made it clear that there would not be a split for the sake of it. However, the CEO failed to explain why the three divisions should be retained. There are hardly any synergies between the businesses.
