Bayer rolls out new operating model, eliminates managerial staff in restructuring


Bayer rolls out new operating model, eliminates managerial staff in restructuring

Published: Jan 18, 2024

By Tristan Manalac


Bayer on Wednesday revealed a new operating model meant to cut back on bureaucracy and hierarchies, as well as streamline the company’s structures, in an effort to boost its operational efficiency.

The model, dubbed Dynamic Shared Ownership (DSO), is designed to “make the company much more agile,” according to Bayer’s announcement. The restructuring initiative will include job cuts over the next couple of months to be completed by the end of 2025, at the latest.

“In line with the principles of DSO, the implementation will be largely decentralized, meaning that its scope cannot be quantified for the time being,” according to the company. Bayer employs some 22,200 staff in Germany and, as of the end of 2023, had a global headcount of more than 101,000.

Though Bayer has not specified how many posts the layoffs will affect, Barbara Gansewendt, chairwoman of the Group Executives’ Committee at the company, said in a statement that it “will come at the expense of many managerial employees.” The committee represents the interests of manager-level staff at Bayer.

Gansewendt called these layoffs an “extremely bitter development” for Bayer, adding that there is “no viable alternative” for the company. Affected staff will receive an “attractive” severance pay and will be given adequate support to help them find “new employment as quickly as possible,” she said.

The new DSO operating model comes after new Bayer CEO Bill Anderson hinted at major structural changes during its third-quarter earnings report in November 2023. At the time, Anderson was expressed disappointment in the company’s performance, pointing to its “zero cash flow” which he called “simply not acceptable.”

A Roche alum, Anderson won his seat at Bayer in February 2023, with the unanimous support of the company’s supervisory board. He formally assumed the helm in June 2023.

Anderson inherits from the previous CEO—Werner Baumann, who had served Bayer for 35 years—a company reeling from the disastrous acquisition of the agricultural giant Monsanto. The buyout, signed in September 2016 for $66 billion, was at the time touted by Baumann as a “major step forward” for the company’s crop science business.

In the years that followed, however, Monsanto’s weed-killer Roundup would be plagued by claims of cancer, ultimately racking up more than 42,000 lawsuits for Bayer. In its third-quarter 2023 financial report, Bayer posted a net debt of around $42.18 billion.

Beyond the Monsanto debacle, Bayer’s pharmaceuticals business also suffered major setbacks last year. In November 2023, the company voluntarily pulled its follicular lymphoma therapy Aliqopa (copanlisib) from the U.S. market after it failed its confirmatory Phase III study. Aliqopa was given accelerated approval in September 2017.

A few days later, Bayer decided to pull the plug on the Phase III OCEANIC-AF study of its inhibitor factor XIa asundexian after an Independent Data Monitoring Committee found that it had “inferior efficacy” to BMS and Pfizer’s Eliquis (apixaban).

Source: BioSpace