French Drugmaker Sanofi May Cut Hundreds Of Jobs To Cut Costs

French-based pharmaceutical giant Sanofi (SNY) is reportedly considering significant job cuts to reduce costs and boost profits.

Reuters reported that about 1,000 jobs may be at risk in France as part of a new restructuring strategy by chief executive Paul Hudson. These cuts would occur over a three-year period, with no forced redundancies.

Sanofi’s management and staff representatives will meet on Friday and Monday to discuss the plan, which may include changes in a number of European countries and possibly others outside the euro region.

"The COVID-19 [pandemic] had slowed the announcement, but [these measures] are part of the CEO roadmap," a source told Reuters.

Sanofi’s U.S. vaccines and rare diseases subsidiary Genzyme would reportedly be spared.

"Information will be shared with staff representatives first and no redundancy plan will be presented then," the company said.

Last December, Hudson unveiled plans to cut 2 billion euros ($2.24 billion) in costs by 2022. The new plans will likely include measures from that earlier announcement.

"As a matter of good practice and to maintain the constructive dialogues with our social partners, we never share any information before our meetings," a Sanofi spokeswoman told FiercePharma. "However, we have shared publicly that we are realigning our structure to support a new corporate strategy to better drive growth and innovation."

Under Hudson’s tenure, Sanofi ceased research in diabetes and cardiovascular, reduced the overall number of its divisions and raised profit targets.

Last year, Sanofi said it would purchase U.S. biotechnology firm Synthorx for about $2.5 billion.

Sanofi will also focus more on vaccines – and is currently working on two drugs to prevent covid-19. Less than two weeks ago, Sanofi said it will spend 610 million euros ($683 million) to convert two French sites into a hub dedicated to research, development and production of vaccines.

Sanofi has periodically enacted job cuts to reduce costs and refocus its businesses. In June 2019, the company cut 466 jobs in France and Germany in order to restructure its research and development operations.

Biospace.com reported that the timing of the job cuts is “interesting,” noting that on Tuesday Sanofi Pasteur, the vaccines business unit of Sanofi, and Translate Bio of Lexington, Mass., expanded an existing collaboration to develop messenger RNA vaccines for infectious diseases.

Under the new deal, Sanofi will pay Translate Bio $425 million up front. Translate Bio will also be eligible for potential milestones and other payments of up to $1.9 billion.

“As all eyes are on prevention of infectious disease through vaccines, this is a pointed moment in time where we are called upon to seek innovative ways to protect public health,” said Thomas Triomphe, executive vice president at Sanofi Pasteur.

Sanofi will receive a 7.2% stake in Translate Bio including to rights to vaccines, including one for covid-19.