Bloomberg News

Sanofi Plans 900 Job Cuts Amid French Research Overhaul

September 25, 2012

Sanofi, France’s biggest drugmaker, said it may eliminate as many as 900 jobs in three years as part of a strategy to trim operations in its home market.

The company hasn’t reached a decision on the future of its Toulouse research site, Paris-based Sanofi said in a statement today. The center employs about 640 researchers, which brings the number of jobs at risk to more than 1,500, according to labor unions.

Worker representatives have been protesting the plan, one in a broader wave of cost-cutting measures by French companies that include PSA Peugeot Citroen and Carrefour SA, since Sanofi first announced an overhaul on July 5. Union delegates and employees have staged protests every Thursday across France in recent weeks, marching in the streets with local politicians in places like Toulouse, where researchers discovered the blood- thinner Plavix.

“It’s a sad day for Toulouse and for France,” Jean-Louis Chauzy, president of the region’s council on the economy, social affairs and the environment, said in a telephone interview. “Research may have to evolve, but Sanofi should retain jobs.”

2,500 Posts

The drugmaker presented a plan to the government in July to cut 2,500 jobs, Arnaud Montebourg, the minister mandated with promoting employment, said at a press conference in Paris today. Montebourg and other officials persuaded the company to reduce the scope of the cuts after meeting with Sanofi’s top executives over the summer and during a two-hour meeting last night at the Elysee presidential palace, Montebourg said.

“Nine hundred job cuts is 900 too many,” Laurent Ziegelmeyer, a representative of the CGT union, said in a telephone interview today.

Workers will be offered jobs elsewhere in France or be given an early retirement package, Sanofi said.

The drugmaker, struggling amid a wave of patent expirations that’s wiping out sales of its best-selling products, is increasingly focusing on partnerships and acquisitions, including last year’s $20.1 billion purchase of the U.S. biotech company Genzyme Corp. (GENZ:US) Sanofi has already slashed about 4,000 cuts in France since Chief Executive Officer Chris Viehbacher took over in December 2008, according to labor unions.

Toulouse’s Fate

“The function of the Toulouse site remains to be specified,” Sanofi said today. The company “identified during the summer potential stakeholders who could maintain the site’s scientific or technological capacity.”

Until last week, Sanofi was planning to shutter the Toulouse site, Christophe Borgel, a member of Parliament, told reporters following a press conference in Paris today.

Sanofi said in July it also plans to end research in Montpellier, another historical site, and cut positions in support functions and at its Pasteur vaccine unit. Montpellier may become a strategic center for drug development, it said.

“The company is still vague about Toulouse and Montpellier,” which employs about 200 researchers, Ziegelmeyer said. He and other union members said they first heard details of the overhaul today, when Sanofi sent a note to employees along with a statement to the media.

Labor Talks

The 900 job-cut estimate doesn’t include Toulouse, Jean- Marc Podvin, a spokesman for the company, said in a telephone interview. Sanofi will discuss details of its plan with labor unions in the coming days, he said.

The government will “monitor” the negotiations between the company and labor unions over the future of the Toulouse site, Montebourg said today.

“Sanofi’s wording has changed,” Borgel, the lawmaker, told reporters. “They are no longer saying they will shut the Toulouse site. Now they are speaking of negotiations. It’s a first step. The history of Sanofi with France isn’t over.”

The drugmaker employed more than 110,000 people globally at the end of 2011 and has 28,000 employees in France.

To contact the reporter on this story: Albertina Torsoli in Paris at atorsoli@bloomberg.net

To contact the editor responsible for this story: Phil Serafino at pserafino@bloomberg.net


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