The German parent of Merck Serono, the biopharma company, announced plans on Tuesday to close its Geneva headquarters with a loss of 1,250 jobs.
The executive board of Merck, based in Darmstadt, Germany, issued a statement outlining the decision, greeted with consternation by Swiss officials.
The company said it planned to transfer 750 jobs and eliminate the other 500 jobs in Geneva, while cutting an additional 80 positions at its three Swiss manufacturing sites.
The plants are in Corsier-sur-Vevey, Coinsins and Aubonne in the canton of Vaud.
The company’s headquarters are to be consolidated on an existing “campus” in Darmstadt.
The aim is “to create a leaner, more agile organization,” Merck said in a press release.
The company saw its profits drop by 46 percent last year to 304 million euros as it struggled to expand its product line.
It said the plan to close the headquarters would be fully implemented by the first half of 2013, with relocations and redundancies to start in the second half of this year.
Merck said the move was part of a “comprehensive transformation program” announced by the company in February.
Pierre-Francois Unger, Geneva’s economy minister, described the planned closure as a “seismic shift” for the economy of Geneva and Suisse Romande (French-speaking Switzerland), the Tribune de Genève reported on its website.
Merck Serono’s offices and research center in the Sécheron neighbourhood sprawl across an entire block, including a glass and steel building awarded internationally for its architectural excellence.
Swiss entrepreneur Ernesto Bertarelli became a billionaire when he and his family sold Serono to Merck in 2007 for 13.3 billion dollars, creating the Merck Serono company.
Serono gained attention in the field of biotechnology with such drugs as Rebif, used to treat forms of Multiple Sclerosis.
More details of the planned closure of Merck Serono’s headquarters were released on the company’s website.
The company said it intends to relocate “certain Geneva-based functions” to existing company sites in Germany, the United States and China.
Merck said the plan is part of a “transformation program . . . focused on addressing
unprecedented market shifts, increasing competition in key product areas and existing
inefficiencies in its own organization”.
The company pledged to find “socially responsible solutions” for workers affected by redundancies.
It has also promised a consultation process, starting on Thursday, to consider alternative suggestions from employees.
“The planned measures for Merck Serono’s operations in Switzerland are needed to
ensure our global competitive position in a rapidly changing market and to secure the
long-term future of the company,” Stefan Oschmann, executive board member responsible for the Merck Serono division, said in a release.
Tribune de Genève blogger Edward Gobits offers an interesting explanation of how Merck Serono has arrived at this situation. Gobits maintains the company’s ultimate fate was sealed as soon as it was created, after Ernesto Bertarelli sold Serono in a marketing coup that involved building lavish headquarters in Geneva and backing the Alinghi yacht team, the two-time America’s Cup winner. To read the blog (in French) click here.