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Bayer wants to tighten austerity program – more jobs at risk

Bayer has announced that it intends to save several billion euros in addition. The agricultural business in particular is doing badly because of the Corona crisis. Other jobs are at risk.

The pharmaceutical and agrochemical company Bayer wants to save even more. From 2024, more than 1.5 billion euros per year in costs will be eliminated, the Dax group announced on Wednesday evening. This is necessary in order to be able to survive in a continuously challenging market environment. A further reduction in jobs is also possible.

The savings should be achieved in addition to the annual earnings contributions from 2022 of 2.6 billion euros, which were announced in November 2018. The money is earmarked for further investments in innovation and profitable growth opportunities as well as for debt reduction.

Buying Monsanto costs Bayer a lot of money

Bayer had spent a lot of money in 2018 to buy the US seed giant Monsanto and are thus also holding numerous legal problems around alleged cancer risks of the weed killer Roundup with the active ingredient glyphosate. Billions in comparisons are being made.

For 2021, the group expects sales to be roughly at the level of 2020. In terms of currency-adjusted earnings per share, the group expects a decline.

Bayer confirmed the lowered outlook for this year. In the agricultural sector in particular, growth expectations were reduced during the corona crisis, it said. This situation is unlikely to change in the near future. The direct effects of the pandemic would be more profound here than initially expected.

Bayer can imagine smaller acquisitions

In addition to lower prices, more intense competition and lower biofuel consumption, the Group also cited sometimes massive negative currency effects such as the Brazilian real as negative factors. Against this background, Bayer expects depreciation in the agricultural business in the mid to upper single-digit billion euro range.

It looks much better for the other business areas. The pharmaceutical sector is expected to grow again in the coming year, it said. Increasing investments are planned there, also through the purchase of products. The health sector has developed strongly and should grow faster than comparable competitors in the coming years. Bayer can envisage smaller takeovers here. On the other hand, the company is also looking into selling its own stores and brands on a smaller scale.

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