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German drugs giant to cut "several thousand" jobs
( 2001-08-10 16:52 ) (7 )

The German drugs giant Bayer will cut more jobs than originally indicated in an attempt to resolve its current difficulties, its chairman suggested in a newspaper interview on Friday.

And the chairman said Bayer was steeling itself for a wave of litigation connected with its best-selling anti-cholesterol drug Lipobay, which has been linked with a number of deaths.

"We've heard that a number of claims are being prepared in the US. You always have to expect that," chairman Manfred Schneider told the daily Sueddeutsche Zeitung.

Nevertheless, Bayer regarded any such litigation as groundless "and we will defend ourselves correspondingly," Schneider said.

Bayer would not be making any financial provisions to cover the litigation, he added.

Bayer was plunged into crisis earlier this week with the announcement it was pulling one of its most promising drugs, the anti-cholesterol medication Lipobay/Baycol, from the market after it was linked to 31 deaths in the US, four deaths in Germany, three deaths in Spain and possibly one death in France.

An estimated six million people worldwide have been treated with the drug.

The scandal dealt a serious blow to a company already battered by declining demand and high raw material costs.

And Bayer, maker of aspirin, prescribed on Thursday 1,800 job cuts and the closure of 15 sites worldwide to help counter falling profits and weak demand against the background of the current global economic downturn.

But Schneider indicated that even more jobs could be on the line.

Asked whether the current restructuring programme could lead to "several thousand" job losses, Schneider replied: "On the whole", the job cuts "will certainly reach the magnitude you've mentioned."

However, "we have to talk with those concerned before giving any concrete figures," Schneider added.

The job cuts and closures announced on Thursday would affect mainly the group's polymers division, but Bayer hinted that similar measures might also be implemented in its other businesses.

They were not directly linked to the withdrawal of Lipobay, but the drug scandal would necessarily amplify Bayer's current woes.

"We're in the process of analysing the impact of the withdrawal ... it's still too early to say what consequences it will have," Schneider said.

Analysts suggest that Bayer might be forced to sell its pharmaceuticals division, previously one its biggest earners.

But Schneider once again rejected such a scenario.

"Abandoning our current four-pillar strategy would certainly not be the correct conclusion to draw," he said.

Bayer is currently active in healthcare, agrochemicals, polymers and chemicals.