Novartis to cut 2,200 Swiss jobs by 2020

Novartis currently employs 13,000 people across Switzerland © KEYSTONE / GEORGIOS KEFALAS

The pharmaceutical giant Novartis will cut about 2,200 jobs in Switzerland over the next four years. Nearly 1,500 jobs are affected in production and about 700 in services. 

This restructuring is part of the manufacturing strategy launched in 2015 to adapt the industrial base to a reduced product portfolio, announced Novartis on TuesdayExternal link. It currently employs 13,000 people across Switzerland.

The firm said it intended to “continue to adapt manufacturing network and service activities”.

+ Our story last week on the Novartis job cuts

In total, about 1,500 positions will be cut from Novartis’s production sites in Basel, Stein, Locarno and Schweizerhalle, Chief Executive Vas Narasimhan told reporters on Tuesday.

At the same time, Novartis says there is the potential of creating 450 new jobs in Stein as part of the announced construction of a cell and gene therapy production site. 

In services, Novartis intends to relocate some of its “managerial and transactional capabilities” – which could reach 700 positions by 2022 – to its five global service centres (Dublin, Ireland, Hyderabad, India, Kuala Lumpur, Malaysia, Mexico City, Mexico, and Prague, Czech Republic). In this case, the group’s Basel campus will suffer most of the cuts, the statement said. 

“We are aware of the impact of today’s announcement on potentially affected employees and their families,” said Novartis head Vas Narasimhan. The management has already invited employee representatives and managers in Switzerland for “dialogue and consultation”. 

Novartis insists, however, that its commitment to Switzerland is not in question. 

“We are proud to maintain our global headquarters, our main research and development (R&D) centre and advanced manufacturing facilities that continue to expand,” said Narasimhan. 

Novartis says it is committed to maintaining 10% of its global workforce in Switzerland, creating new technological platforms and investing more than CHF3 billion per year in new research and products.  

Novartis Chairman Joerg Reinhardt said this month the company was planning to streamline its worldwide production to increase its operating profit margin amid declining prices for its drugs in the United States.

“Regret and disappointment”

The canton Basel City authorities on Tuesday reacted with “regret and disappointment” to the news of the job cuts. The canton would assist those affected as much as it could, the cantonal government said in a statementExternal link.

But it said that it was “surprised by the extent of the job cuts”. “For many years the cantonal authorities have accompanied and supported Novartis’ engagement in Basel on many levels,” the statement continued. This was seen as a confirmation of Basel as a location. 

The cantonal government pointed to these kinds of job cuts being an international trend and that Basel City was in danger here. “Here politicians and companies both have a responsibility,” it said. 

The Aargau government criticised the decision to move jobs from the Stein production site to countries paying lower salaries. It is urging the Novartis management to reconsider its decision in order to safe as many jobs as possible at Stein, where Novartis has invested CHF500 million over recent years.

The Swiss union, Unia, demanded Novartis end its ongoing strategy to “dismantle its Swiss sites”. 

Rather than worrying about shareholders’ profits, Novartis should try to guarantee workers secure jobs, it said, adding that employees are paying for management errors. Unia had not been informed in advance of the measures announced by the Basel group, which it said was a violation of the collective work agreement.

The Employees Switzerland union called the announcement a “bitter pill” and a “hard blow for Swiss industry”, while questioning the effectiveness of moving jobs abroad to cheaper countries.