Pittsburgh-based Viatris Inc. recently released additional details of its multi-year global restructuring initiative that when complete could involve a 20 percent reduction in its global workforce.
The initiative is intended to reduce the company’s cost base by at least $1 billion by the end of 2024 or sooner. A significant portion of the reduction is expected to be reached within the first two years.
Viatris was formed last month through the closure of Mylan and Pfizer’s Upjohn unit’s $12 billion generics merger. It boasts itself as a “new kind of healthcare company” that provides access to medicines, advances sustainable operations, and develops innovative solutions.
“Viatris has a tremendous opportunity to impact healthcare in a sustainable way through a focus on access and empowering patients worldwide to live healthier at every stage of life,” Viatris CEO Michael Goettler said on Dec. 11. “The actions we are announcing today are consistent with our commitment to optimally design our new company to operate efficiently. This initiative is part of Viatris’ roadmap to ensure we can maximize long-term value creation for shareholders and for all stakeholders, including the patients and customers we serve.”
Through the multi-year plan, Viatris expects to optimize its commercial capabilities and enabling functions while closing, downsizing, or divesting up to 15 manufacturing facilities worldwide that are deemed no longer viable either due to surplus capacity, challenging market dynamics or a product portfolio shift toward more complex products. Due to this, Viatris expects that up to 20 percent of its 45,000-member global workforce, or 9,000 employees, will be impacted upon completion of the restructuring initiative.
Viatris noted that five sites will be impacted; its oral solid manufacturing facilities in Morgantown, W.V., Baldoyle, Ireland, and Caguas, Puerto Rico, as well as its Unit 11 and Unit 12 active pharmaceutical ingredient manufacturing facilities in India. Additionally, the divesture of the company’s injectable manufacturing site in Poland was recently completed.
Workforce reductions at the impacted manufacturing sites noted in the announcement are expected to occur in phases over the next few years. However, Viatris will seek to find potential buyers for its facilities in an attempt to preserve as many jobs as possible and work with affected communities to identify appropriate potential alternatives, officials said.
Viatris President Rajiv Malik said the company will remain “intently focused on ensuring supply continuity within the markets we serve, which includes continuing our ongoing engagement with health authorities and customers to ensure patients’ needs are met.”
The company’s restructuring initiative incorporates and expands on the restructuring program announced by Mylan earlier this year as part of its business transformation efforts.