United Drug is set to lay off around 150 staff from its Irish supply business.
The contract manufacturing organisation (CMO) puts the move down to government led regulatory decisions to reduce health spending, which they say had a significant impact on their drooping revenues.
Cuts will be made through the company’s voluntary redundancy programme, though the management has not yet confirmed which areas of the business will take the hit.
The decision comes after the company announced its new strategy to reshuffle the business earlier this month.
A spokesperson for the company told Outsourcing-Pharma: “We are embarking on a business transformation programme in order to remain competitive in the market and to continue to ensure access to the crucial medicines required by our customers and their patients.
“Up to 150 full and part time staff may be impacted by the changes depending on the outcome of our voluntary redundancy programme, the extent of redeployment within the business, and the outcomes of discussions with staff.
“We will not be making any further comment on the process and will engage with staff over the coming weeks in an open and reasonable way to secure the best possible outcome for them whilst ensuring that we secure the savings necessary to cope with the industry changes.”
Greener on the other side
The new staff cuts follow May’s Interim Report, which showed that the Irish arm of the firm accounted for only 35 per cent of the total operating profits; a total €893.6m.
And the figures showed a strong performance in their US packaging business, which benefitted from increased volumes from existing clients and contracts with new clients.
United Drug also reported market share gains in the Irish wholesale and pre-wholesale businesses, which largely offset the impact of further significant regulatory changes.
Now Jefferies equity analyst Stephan Gasteyger thinks the future looks promising.
He told Outsourcing-Pharma: “I think the cuts are part of the restructuring plan announced in August.
“They said they were going to merge more roles into one and to integrate jobs in Ireland, and that’s what they’ve done.
“It is a substantial cut, but things are looking promising. United Drug has gained market share in America, and overall in their packaging, home care, contract sales and marketing sectors they are looking financially stable.”