General News

Merck KGaA reaches job agreement

1,100 to go in Germany by 2015

Merck KGaA has signed an agreement with employees on an efficiency plan for its operations in Germany, as part of the ‘Fit for 2018’ series of business transformations it announced in February. This followed months of negotiations with Works Council members. About 1,100 of the 10,900 jobs in Germany will be cut by 2015, but there will be no compulsory redundancies before the end of 2017.

“We now have a roadmap that will position Merck Germany in such a way that the company is prepared for the challenges we will face,” said Kai Beckmann, executive board member responsible for HR. “Now, we need to consistently implement the measures and continue moving ahead with the changes in our company.”
The only possible exception to the rule on redundancies is with regard to possible site closures and transfers that are still being assessed. This may apply to the production of industrial salts in Lehrte and filling operations in Hohenbrunn, which are both being discontinued. Discussions are ongoing about these sites, which employ about 140 people.

As part of the deal, Merck will not implement the wider outsourcing of functions to third parties that it had contemplated. Only about 100 jobs will be lost due to outsourcing, mostly in areas where it is already used, such as routine jobs connected to drug approvals or those needing considerable manual labour, such as certain blending and filling activities.

In financial services, specifically the Merck Shared Services Europe (MSSE) arm, Merck will and employees will “jointly leverage efficiencies” and the operations will remain at its headquarters and main site in Darmstadt at least until the end of 2015, with certain defined targets. The company was also considering relocating MSSE abroad.

Merck envisages an unspecified number of cuts and a restructuring of salaries Darmstadt. However, it will also invest at least €250 million there and at other German sites during the next two years, seeking to turn Darmstadt into “an R&D centre of excellence, with a tightly networked research and knowledge platform for both pharmaceuticals and chemicals”.

The headquarters of the Merck Serono pharmaceutical division is already in the process of moving from Geneva to Darmstadt, while two sites in Switzerland are being closed with the loss of about 500 jobs. 750 more are being transferred. The company has also reached a severance and redeployment package with the local union and created a fund to support ventures by departing employees. Two have begun already.

There has been no word on wider changes. However, given that ‘Fit for 2018’ is a global programme, some observers believe that this is only a matter of time.  As of Q2, Merck had 40,085 employees worldwide.