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Roche exits four manufacturing sites, job cuts imminent

Swiss-based Roche plans to exit four manufacturing sites globally. Workforce reduction is imminent.

According to the press release the Basel-headquartered company issued on Thursday, Roche will exit four manufacturing sites in Clarecastle, Ireland; Leganes, Spain; Segrate, Italy; and Florence, United States.

In an effort to minimise job reductions, the company said, it is actively looking into divestment opportunities for these facilities.

Explaining the reason for this, the company said it was to address current underutilisation as a result of its evolving portfolio.

A new generation of specialised medicines based on small molecules requires novel manufacturing technologies and will be produced in lower volumes than traditional medicines, the company said.

In order to manufacture a new generation of specialised medicines based on small molecules, Roche said it would further invest 300 million Swiss francs into a dedicated facility in Kaiseraugst, Switzerland to support future technology requirements.

Daniel O’Day, Chief Operating Officer, Pharmaceuticals Division of Roche, said:

“With these changes we are responding to the evolution of our small molecule portfolio towards specialised medicines produced in lower volumes.”

“We are aware of the impact this decision has on our colleagues, and we will do our utmost to support them during this transition.”

Workforce reduction

Roche further said it would talk with employee representatives in the four affected countries. The company said the transition would begin in 2016 and is planned to end by 2021.

“Affected employees will be notified as soon as possible and will receive appropriate support during the transition,” Roche said.

Restructuring costs 1.6 B CHF

It is expected that site exits will result in non-core restructuring costs of CHF 1.6 billion until 2021, of which up to CHF 600 million will be in cash. As Roche said, it would include additional efficiency efforts undertaken in the manufacturing network and organisation. Estimated non-core costs in 2015 are up to CHF 800 million, with only a minor cash flow impact in 2015, Roche added.

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