Bayer cuts 1,500 jobs and lowers 2024 earnings guidance as Q1 sales dip

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Bayer

Bayer cuts 1,500 jobs and lowers 2024 earnings guidance as Q1 sales dip

Published: May 14, 2024

By Tristan Manalac

BioSpace

Bayer released its first-quarter 2024 earnings on Tuesday announcing that it has reduced its headcount by approximately 1,500 jobs—mostly management positions—amid a slight decline in sales, while lowering its full-year earnings outlook.

“Approximately two-thirds of these were management jobs,” CEO Bill Anderson said in a Tuesday morning media call, referring to the workforce reductions which impacted its pharmaceuticals, crop science and consumer health divisions.

“Our senior leadership circle is already considerably smaller than it was a year ago,” Anderson noted, adding that the layoffs will help the company hit its target of €500 million ($540 million) of sustainable cost savings in 2024 and €2 billion ($2.16 billion) in 2026.

The reduction in workforce comes as Bayer logged more than $14.86 billion in sales, representing a 4.3% reported decline from the same period during the prior year. When adjusting for currency and portfolio effects, Bayer’s year-over-year decline slowed to 0.6%. Of its three divisions, only pharmaceuticals saw a boost in its Q1 sales.

Bayer’s pharma division performed well in the quarter, increasing nearly 4% to bring in more than $4 billion in sales on a currency- and portfolio-adjusted basis. The company attributed the growth to “significant gains” for its new products Nubeqa (darolutamide), indicated for specific types of prostate cancer, and Kerendia (finerenone), approved for chronic kidney disease in type 2 diabetes.

In Q1, Nubeqa sales grew 59%, reaching nearly $306 million, while Kerendia surged 63.5% bringing in $56 million.

Despite sustaining a slight dip in revenue, the anticoagulant Xarelto (rivaroxaban) and the eye treatment Eylea (aflibercept) remained Bayer’s best-selling assets in the quarter, generating approximately $1 billion and $844 million, respectively.

Looking ahead to the rest of the year, Bayer lowered its 2024 earnings-per-share guidance to a range of $5.19 to $5.62, down from the previously announced $5.35 to $5.78 EPS. The adjustment is due to the “negative impact from anticipated currency effects,” according to the company.

Since taking the helm at Bayer in June 2023, Anderson has tried to turn the company around from its disastrous $66 billion acquisition of agricultural giant Monsanto in 2016.

In January 2024, Anderson rolled out his new operating model designed to maximize operational efficiency and reduce bureaucracy and hierarchies in the company. The new model, dubbed Dynamic Shared Ownership, is a sweeping restructuring initiative that includes job cuts through 2025.

In March 2024, Bayer axed its executive roster which now only counts eight members, down from 14 previous positions.

Source: BioSpace