Pharma firm cuts 400 Swiss jobs

Pharma firm cuts 400 Swiss jobs
Exterior of Lonza office building at Visp (Photo: Lonza)
Basel-based pharmaceutical company Lonza is cutting 400 jobs from its Visp site in the canton of Valais in a bid to boost productivity.

Citing a number of factors, including the high value of the Swiss franc, the company announced on Wednesday that it would be eliminating the jobs over the next two years.
The layoffs are part of an overall plan to reduce annual costs at the Visp site by 100 million francs ($108 million) a year by 2015, the company said.

The sprawling Visp site with its chemical manufacturing plants and 70 labs is the biggest operated by Lonza, with around 2,700 employees.

It produces half the world's supply of the vitamin niacin (40 tons a day) in addition to a variety of other products, including microbial biopharmaceuticals.

However, the company has for some time raised concerns about the site's “unsatisfactory” profitability.

Last year it launched a “VispChallenge” programme to examine ways to improve the efficiency of the Valais operation.

“We will focus all activities on value creation, by reducing the complexity of the site, improving the cost structure and flexibility.” Lonza CEO Richard Ridinger said in a statement.

“This will also include a review of business models and optimization of the portfolio,” Ridinger said.

“These critical measures will unfortunately also require a reduction of 400 positions within 24 months,” he said.

A social plan is in place to handle layoffs, however the company said it will offer employees internal transfers, while early retirements and natural attrition are expected to soften the impact of the job losses.

A review of corporate functions has also led to a cut in 100 other positions in Lonza’s global operations over the next two years.
The company said despite difficult “macro-economic challenges” the company expects to meet its financial targets for the full year of 2012.

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