Novartis Reverses Plant Closure In Switzerland

Novartis Reverses Plant Closure In Switzerland

January 18th, 2012 // 2:27 pm @

Nearly three months of sustained pressure has prompted Novartis to change its corporate mind and abandon plans to close a plant in Vaud, Switzerland, a step that will save about 320 jobs. At the same time, the drugmaker will elminate fewer than the 760 jobs that were originally to have been cut at a chemical plant in Basel.

The move comes in response to demonstrations by Novartis workers, protests from local politicians and, in one case, a publicized boycott of Novartis medicines by a doctor in Switzerland (see here), where the drugmaker is headquartered and residents were unnerved by the extent of the planned job cuts. Until recently, Novartis employees in other countries have borne the brunt of widespread layoffs.

Last week, the drugmaker disclosed plans to axe 1,630 US sales reps and another 360 positions from its US headquarters in New Jersey in response to a failed clinical trial for a hypertension med (read here). Another 900 jobs were trimmed last fall from the US and, in 2010, the drugmaker slashed 1,400 US sales reps and another 550 jobs at a manufacturing site in the UK (back story).

But plans announced last fall to eliminate 1,100 jobs from Switzerland caused an uproar, especially since of the work was to have been outsourced to China and India. Unlike in other countries, though, Novartis has given in to public outcry. Although what apparently helped the drugmaker to reverse course are some temporary tax breaks issued by the local government in Vaud, where an investment will be made to modernize the plant.

In a statement, the drugmaker says that all personnel, however, will forego some of their salary increases this year and those covered by a collective bargaining agreement will see their working hours reduced (here is the statement).

As part of the change of heart, Novartis will now redeploy about one third of the 760 employees who work at the Basel plant, and a spin off of the toxicology group is also being pursued. Meanwhile, the drugmaker maintains it will study proposals about the restructuring at the Nyon and Basel plants that were proposed by unions representing its workers. Novartis employs around 12,500 in Switzerland.


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