Recipharm to cut jobs in Sweden to reduce costs

By Gareth Macdonald contact

- Last updated on GMT

Recipharm headquarters in Jordbro, Sweden
Recipharm headquarters in Jordbro, Sweden

Related tags: Employment

Recipharm will cut jobs to reduce costs after lower customer demand.

The Swedish contract manufacturing organisation (CMO) said 100 positions at various operations in the greater Stockholm area are subject to notice.

In an official statement Recipharm said: "The ambition is to achieve annual savings in excess of SEK60m [$7.2m] from headcount reductions as well as savings in external costs.

"There will also be efficiencies to gain from streamlining the product range and termination of less profitable contracts.

CEO Thomas Eldered told us "We are announcing this due to the need to adapt our capacity to forecasted volumes of certain products and also to capture improvement opportunities.

"The headcount reduction is subject to negotiations with unions, but it is estimated that first jobs will go beginning of next year and then continue during the year. This headcount reduction is only related the manufacturing facility  in Stockholm, and it will be manufacturing jobs in a broad sense, including QC/QA, technical, project management etc​"

He added that: "We do not comment on specific contracts or customers. The main reason for the volume decrease we have seen is lower demand of certain products from a few customers, mainly due to lower sales in the market​."

Recipharm expects the job cuts - the precise number of which is still being discussed with labour unions - will cost SEK15m.

Cost cutting

The cuts - which come just months​ after Recipharm's business model was lauded at an awards ceremony by SwedenBio chairman Lars Aldersson - are the first announced since the CMO went public in 2014​.

Since going public Recipharm has made several acquisitions - Corvette​, Lusomedicamenta​ and most recently contract research organisation (CRO) OnTarget Chemistry​ - and signed a number of new supply deals.

In December last year, Recipharm also lost its contract with Meda, which transferred production to another European CMO.

At the time​, Recipharm told us the contract generated about 2% of its revenue.

It also warned that 60 jobs would be at risk at its plant in Strängnäs when production comes to an end in December this year.

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