Bayer boss Bill Anderson has never made a secret about what the ideal employee looks like for him and what structure a company should have. Employees should think like entrepreneurs and the structure of a company should be lean, i.e. consist of as few hierarchy levels as possible. In recent months, Anderson has made it clear that Bayer is pretty far from his ideals. The CEO announced weeks ago that he wanted to introduce a new organizational model worldwide. It’s called “Dynamic Shared Ownership”. Bayer does not provide a translation. In terms of meaning, the expression “shared responsibility” comes close to the English term, and the whole thing should also be dynamic.
Since Wednesday evening, when the company sent out a press release, it has become clearer what this means for the approximately 22,000 employees in Germany: a “significant reduction in personnel”. Bayer does not mention a number in the statement. The job cuts should be completed by the end of 2025 at the latest.
Bayer is currently in a difficult situation for “various reasons,” Heike Prinz, board member and labor director, is quoted in the statement. And that “drastic measures” are necessary. She probably used similar words at the works meeting on Thursday afternoon, in which the employees were informed about the model.
The works council agreed to further cuts “with a heavy heart”.
The share price fell by almost three percent on Thursday by early afternoon. Since May 2016, when the Leverkusen-based company announced its takeover of Monsanto, the stock has lost around two thirds of its value. “We expect that Bayer is aware of the urgency of its situation,” said Markus Manns, fund manager at Union Investment of SZ. The fund company expects a critical review of the group structure and measures to limit legal risks, reduce debt, increase cash flow and improve the pharmaceutical pipeline, i.e. to have more promising products in development. Investors’ confidence urgently needs to be restored.
Heike Hausfeld, chairwoman of the general works council, is quoted as saying in the company’s statement that the works council agreed to further cuts “with a heavy heart”. However, in the negotiations with the employer it was possible to make the upcoming job cuts “as socially acceptable as possible within the framework of the existing possibilities”. General job security has been extended for another year until the end of 2026. “The danger of redundancies for operational reasons, which has been theoretical for 27 years, has now become a real option,” quotes the Rheinische Post Hausfeld.
Barbara Gansewendt, chairwoman of the Bayer AG Group Spokespersons’ Committee, also has a say in the announcement; she represents the senior employees. The new operating model will come at the expense of many managers. “This is an extremely bitter development for us, but there is no viable alternative under the given conditions,” said Gansewendt.