Novartis Global Restructuring To Cut Thousands of Jobs

Reports of potential layoffs flooded in after Novartis announced plans to combine its pharmaceutical and oncology businesses earlier this month. Now, Novartis has hired Wall Street analyst Ronny Gal to lead the merger while confirming that thousands of jobs could be at risk.

"Broadly, we expect thousands of positions across the company to be affected by this change," a Novartis spokesman said. "This will depend on consultation with the Works Council and finalization of the overall organizational structure. The spokesman said the company did not give an exact number of layoffs given that the restructuring plan is still in flux. She added that Novartis expects "the new structure to be fully operational by the end of 2022."

In early April, Novartis announced that it would integrate its pharma and oncology business units and create two separate commercial organizations with stronger geographic focus—the U.S. Innovative Medicines Division and the International Innovative Medicines Division.

At the same time, as part of the restructuring plan, Novartis created the position of Chief Strategy and Growth Officer, a new position responsible for corporate strategy, R&D portfolio strategy and business development.

Novartis made a surprise decision on Tuesday to appoint Dr. Ronny Gal, a senior analyst at Sanford Bernstein, to the role. Novartis CEO Vas Narasimhan emphasized that the work will be independent of Novartis' R&D and commercial teams.

Based on Novartis' current M&A focus, Gal will be looking for companies under $2 billion, Narasimhan said. The restructuring aims to save at least $1 billion annually by 2024.

By the end of 2021, Novartis had 41,280 employees in sales and marketing. At the time, the company had nearly 12,800 employees in operations and 4,727 in general administration.