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Sanofi Plans 900 Job Cuts Amid French Research Overhaul

Sanofi (SAN), France’s biggest drugmaker, said it may eliminate as many as 900 jobs within three years as part of a strategy to trim operations in its home market.

The Paris-based company hasn’t reached a decision on the future of its Toulouse research site, Sanofi said in an e-mailed statement today. Toulouse employs about 640 researchers, which brings the number of jobs at risk to more than 1,500, according to labor unions.

The unions have been protesting the plan, one in a broader wave of cost-cutting measures by French companies that include PSA Peugeot Citroen and Carrefour SA, since Sanofi first announced an overhaul on July 5. Union delegates and employees staged protests every Thursday across France in recent weeks, marching the streets with local politicians in places like Toulouse, where researchers discovered the blood-thinner Plavix.

“It’s a sad day for Toulouse and for France,” Jean-Louis Chauzy, president of the region’s council on the economy, social affairs and the environment, said in an interview. “Research may have to evolve, but Sanofi should retain jobs.”

Labor unions were bracing for as many as 2,500 job cuts. Arnaud Montebourg, the government minister mandated with promoting employment, said he had persuaded the company to reduce the scope of job cuts after meeting with Sanofi’s top executives throughout the summer and last night at the Elysee presidential palace.

“900 job cuts is 900 too many,” Laurent Ziegelmeyer, a CGT representative, said in a phone interview today.

Workers will be offered jobs elsewhere in France as well as early retirement plans, Sanofi said.

Toulouse’s Fate

The drugmaker, struggling amid a wave of patent expirations that’s wiping out sales of its best-selling products, is increasingly focusing on partnerships and acquisitions, including last year’s $20.1 billion purchase of the U.S. biotech Genzyme Corp. The company has already slashed about 4,000 cuts in France since Chief Executive Officer Chris Viehbacher took over in December 2008, according to labor unions.

“The function of the Toulouse site remains to be specified,” Sanofi said today. The company “identified during the summer potential stakeholders who could maintain the site’s scientific or technological capacity.”

‘Still Vague’

Sanofi also said in July it planned to end research in Montpellier, another historical site, and cut positions in support functions and at its Pasteur vaccine unit. Montpellier may become a strategic center for drug development, it said.

“The company is still vague about Toulouse and Montpellier,” which employs about 200 researchers, Ziegelmeyer said. He and other union members said they first heard details of the overhaul today, when Sanofi sent a note to employees along with a statement to the media.

The 900 job-cut estimate doesn’t include Toulouse, Jean- Marc Podvin, a spokesman for the company, said in a telephone interview. Sanofi will discuss details of its plan with labor unions in the coming days, he said.

The drugmaker employed more than 110,000 people globally at the end of 2011.

To contact the reporter on this story: Albertina Torsoli in Paris at atorsoli@bloomberg.net

To contact the editor responsible for this story: Phil Serafino at pserafino@bloomberg.net

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