[Reporter’s View] ERP hits industry again

Multinational pharmaceutical companies are again hit by early retirement programs at the end of the year

Another round of layoffs at multinational pharmaceutical companies are underway with the nearing end of the year.

 

Starting in the second half of the year, 5 companies have already launched early retirement programs (ERPs).

 

The reasons are varied.

 

Whether it's their cash cow crisis, divestitures, or mergers and acquisitions, multinational pharmaceutical companies are taking a hard look at their situation and making layoffs where they deem necessary.

 

This has become a common occurrence in the pharmaceutical industry.

 

In fact, multinational pharmaceutical companies have made mergers and acquisitions (M&A) this year in a variety of rare disease areas, including autoimmune diseases, radiopharmaceuticals, cell therapies, and Alzheimer's disease treatments.

 

They have focused on acquiring rare disease pipelines through small deals under $5 billion.

 

Most of the spin-offs and divestitures of multinational pharmaceutical companies are driven by their “separation of innovation and legacy.” While the companies have undergone activities under the major premise of “choice and focus,” the spin-offs and divestitures have also brought a negative side effect - layoffs.

 

Especially when it comes to layoffs as a result of divestitures, it's not your typical ERP.

 

It's called voluntary retirement, but it's much less “resource-oriented." That's why the news of such an ERP process often leads to labor-management conflicts.

 

The good news is that ERPs in multinational companies offer significant compensation.

 

Especially ERPs that were initiated by spinoffs or selloffs often offer industry-leading compensation packages.

 

For those who have been thinking about changing jobs, ERP can be a good thing.

 

But not everyone wishes to change jobs.

 

For some people, a company is more than just a place to make a living, it's a source of value and pride.

 

When layoffs are unavoidable, companies should focus on maximizing compensation and succession.

 

The coercion behind the word “voluntary” is something that needs to be addressed, and the size of the layoffs should not be vague.

 

There are no good layoffs.

 

Even if some people are happy, they are few and far between.

 

Some people will feel a sense of loss and disconnection just knowing that they've been labeled as redundancies.

 

As the company the employees relied on and were proud of, as an independent pharmaceutical company and not just a Korean subsidiary of a multinational pharmaceutical company, the companies should take the initiative to convince the headquarters if there is room for improvement and take an interest in the future of their employees.